Lack of time
One of the biggest obstacles for medical professionals
to manage your own finances is a lack of time.
This lack of time generally leads to some of the following symptoms:
– Scattered finances: you may have accumulated various super funds, bank accounts and credit cards, which leads to inefficiencies and higher fees.
– Cash flow pressures: you have no cash flow structure, probably spend too much and have no real plan to save or pay off debts; as a result, you are feeling stressed about your money because there never seems to be enough of it.
– Over/under-insurance: if you have various super funds, you will typically also have several insurance policies on top of any personal policies you may have; conversely, you may also be under-insured as you haven’t reviewed your cover since you started you career – you may have taken on more debts and started a family since then.
– Estate planning out of date or non-existent: you either did your Wills many years ago and never reviewed them, or just never got around to it.
– Inefficient finance structure: you are not paying down your mortgage quickly enough and it has been a while since you reviewed your loan structure and the interest rate you are paying.
However, even if you did have the time to manage your own financial affairs, you should consider the opportunity cost of doing so. As a medical professional, you understand the dollar value of your time, and why it may be better to outsource certain tasks or projects to your staff or other professionals.
It is no different with your financial affairs: why not delegate this to a qualified specialist adviser who will be more effective in managing this for you, so you can focus on what you do best and also spend time with your loved ones?
How to choose a financial adviser for doctors or dentists?
Once you have made the decision to engage a financial adviser, how do you find the right one? We believe you should look out for the following characteristics:
The adviser should have experience in dealing with clients who have similar characteristics to yourself. Ask the adviser what type of medical professionals they work with, and what their particular expertise is in this area. Can they back this up with client testimonials, or perhaps they have written publications on the topic?
Do they understand both your business and personal finances? Do they have experience in advising clients who run a private practice?
Check their technical competence by asking questions about their qualifications and their dedication to ongoing professional development.
Financial Advisers should ideally be a Certified Financial Planner TM, and the Financial Planning Association (www.fpa.com.au) has a database of its members on their website.
Can the adviser explain their advice process in simple terms? Do they provide a one-off plan or are they committed to working with you for the long term? Are they just in the business of selling products or do they focus on strategic advice?
Network of other professionals
Does the adviser have strong relationships with other professionals you may need to use, such as lawyers, accountants, brokers? The strength of an adviser’s professional network is generally a good indication of their philosophy in relation to providing comprehensive advice that considers all of your circumstances. Make sure you check whether they get any referral fees for referring you to another service provider.
Transparent fee schedule
The adviser should provide their service on a fixed fee basis, to avoid any potential conflict of interest. Before you engage them, they should be able to quote you a project fee, fixed annual retainer or ongoing fee which is dollar-based, rather than a percentage of your assets for example (generally 1.1%), an hourly rate, or commissions. You should receive a written service agreement.
Also, the Adviser should never shy away from questions regarding their fees and should be able to discuss and justify them with confidence. Don’t be afraid to ask the right questions and ensure you are comfortable with how (much) you are being charged for the services provided.
Rapport, trust, care factor
Most importantly, you need to ensure your adviser genuinely cares about you and your family. They don’t need to become your best friend, but they do need to take the time to get to know you and your values; it should become clear in the first meeting whether you ‘click’ or not and whether they are genuinely interested in establishing a long-term relationship.
How we provide financial advice for doctors and dentists
We engage with our clients for at least a 12 month period and work on fixed dollar fee terms. We have developed a high level of expertise in working with medical professionals throughout Australia and get involved with both your business and personal finances. We are Australia’s leading financial adviser for doctors and dentists. We are very selective in who we work with, as we develop close relationships with our clients that last for many years.
If you are interested in engaging us as your financial adviser, then please contact us to book your free initial meeting.
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“Very informative, a financial ‘nuts-and-bolts’ that every doctor should read.”
~ Dr Green
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