The fee and payment system in medicine is a big black box. Patients
don’t know the true costs of medical care and we have no clue what bill
the patient gets when we order all those tests. There’s a black box with
financial advisors also: fees. I have not yet met a physician who knows
exactly what fees he’s paying to his financial advisor.
A very busy emergency physician, Dr. Smith turned to a financial advisor
– Frank – to handle his investments. Initially Dr. Smith was happy, but
eventually realized he didn’t understand the investment strategy.
No question generates more angst or consumes more discussion for a
democratic emergency medicine (EM) group than how much to pay for
practice leadership and administration. In the typical democratic EM
group, every dollar of proposed leadership or practice management
expenditure is challenged and every dollar of approved expenditure is
resented to one degree or another.
In financial advising, the magic “F” word is “fiduciary.” If your advisor doesn’t use this word, watch your back.
Want to manage your wealth like a pro? Start by checking your ego at the
door and avoiding these five classic financial planning pitfalls.
Recap from last month: Dr. Smith, a 45 year old emergency physician with
a $500,000 investment portfolio, didn’t have time to manage his
investments and hired Frank, a financial advisor at a big brokerage
firm. To continue the story, upon transferring his portfolio to Frank’s
firm, Frank tells Dr. Smith that after thorough research he uses only
the best money managers.
Meet Dr. Smith.
Dr. Smith is a 45-year-old emergency physician, married, with two
children. He’s been practicing emergency medicine for 12 years. He’s
paid down most of his student loans and has been saving some money in
his SEP IRA over the years.
Unfortunately we have to assume that taxes are going up for
everyone--not just “rich” doctors--in 2011. So before
you buy all those Christmas presents, you’d be wise to consider some
ways to keep more money in your pocket:
Just got a year-end bonus? First, spend some of it. Go to Vegas, buy an
iPad, whatever it takes to take your mind off Press Ganey scores and the
grueling night shifts. (I bet you haven’t heard that from a financial
advisor before.) Once you’ve taken care of that piece, here are a few
options for spending what remains.