Mistakes Physicians Make

PHYSICIANS: FINANCIAL MISTAKES and what to do about them:

Not taking a “Financial Wellness” approach: It is important to treat your financial health like you would your physical health.  Having a “check- up” with your Wealth Advisor at least yearly, helps you avoid getting off track and missing out on new opportunities in the ever-changing financial landscape.  Simply not paying attention and being too busy tends to hinder your progress.

  • Tip:  Consider a “gotomeeting” with your financial advisor.  This will allow you to see his/her computer screen to review your Wealth Plan and investments.  This can be done anywhere at your convenience and can save time.
  • Tip:  Having your Wealth Plan App available on your phone or device can allow you to see your plan updated to current values 24/7.
  • Tip:  Consider receiving electronic statements on your Wealth Plan App for easy download, storage and review as well as eliminate cumbersome paper filing.
  • Tip:  Consider storing your important documents such as will, trust, and insurance policies on your Wealth Plan App in your personal secure vault.  This allows for convenient access and organization of your records.

Making decisions based on market news: It is important to have your assets invested based on your time horizon and risk tolerance instead of reacting to every headline. 

  • Tip:  Having an up-to-date Wealth Plan can give you peace of mind that you are on track to meet your specific financial and life goals.

Not having enough or the right insurance: As a physician it is important to protect yourself and your family members with adequate insurances based on your goals.  Protecting your income and assets adequately from financial risk is important.  If you have an occupational specialty additional and specific income protection should be considered. 

  • Tip:  Choose a financial professional who specializes in understanding the specific needs physicians require.
  • Tip:  Physician specialty occupation insurance is a complex area that requires monitoring and review.

Choosing the wrong Financial Advisor: Physicians face unique financial situations and having an advisor who is not versed in these areas can be detrimental to success.  An advisor that adheres to the “fiduciary standard” is required to act in your best interest and should be strongly considered. 

  • Tip:  Registered Investment Advisors and a CERTIFIED FINANCIAL PLANNER™ Practitioners are expected to act in this capacity.

Failing to maximize your employee benefits: It can be overwhelming to physicians when they receive a 3 inch packet of information from their human resource department not knowing which benefits to enroll in, how to maximize them or how they fit into your Wealth Plan.  The human resource department normally does not give financial advice nor may be qualified to do so.

  • Tip: A specialized financial advisor will coordinate your Wealth Plan with the benefits available to help you design a strategy to maximize these opportunities.
  • Tip:  Consider alternatives to the default investment option in your retirement plan as it may not be appropriate for your specific situation. 
  • Tip:  Consider specific terms of insurance coverages such as own-occupation, portability features, and other important details.
  • Tip:  Consider the details, tax and legal implications of recruitment benefits such as forgiveness loans.

Gambling on exotic investments: These exotic investments are “deals that can only be sold to doctors” according to Professor Dahle (ACEP Now, 10/16)  If it sounds to good to be true, it probably is. 

  • Tip:  Extreme caution and due diligence is required.  Consult your Financial Advisor, Attorney and CPA.

*This list of mistakes is some we have observed over the years working with physicians and are based on our specific practice.  These are not all inclusive nor do they apply to anyone specifically.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable.

Investing involves risk.  Investors may incur a profit or loss regardless of strategy selected.  There is no guarantee that using an advisor or having a financial plan will produce favorable investment results or financial success. The information in this article is not intended as tax, legal, investment, or retirement advice or recommendations, and it may not be relied on for the purpose of avoiding any federal tax penalties. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. The content is derived from sources believed to be accurate. This and/or the accompanying information was prepared by or obtained from sources that Professional Financial believes to be reliable, but Professional Financial does not guarantee its accuracy or completeness. Any opinions expressed or implied herein are not necessarily the same as those of Professional Financial’s and are subject to change without notice. Any market prices are only indications of market values and are subject to change. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.