A very common question(s) we get: What value can financial planning bring to me as a physician? Or simply put, what do you do for me?

Proper financial planning is indispensable for setting you on the right financial path and making sure you make the right decisions about money. We’ll cover some of the under-realized benefits of financial planning, plus what to look for in an advisor.

As a physician, your financial well-being is likely top of mind, from paying down student debt to shoring up savings to investing for your bright future.

Creating a holistic plan that accomplishes those goals can be a challenge for anyone, whether a budgeting novice or a personal finance pro. With money, there are several moving pieces, so it can help to have someone in your corner guiding you through your financial planning, which frees up your time to focus on building and living your best life.

When you think about financial planning, what comes to mind? Maybe it’s investments, debt, savings, or a combination. But financial planning comes in many shapes and sizes. Just like there isn’t only one type of specialization for doctors, there isn’t one universal type of financial planning or the services different firms offer.

Given the fluctuation, it can be challenging to determine all the benefits that a financial planner can bring to the table.

Key Takeaways

• Financial planning helps you get on the right financial track.
• An experienced planner can prevent you from making costly financial mistakes.
• Financial planning allows you to work toward your goals and stay accountable for your habits.

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The Value of Financial Planning

You can’t see or touch financial planning like you could a brand-new shiny iPhone, so its value isn’t always immediately apparent. But true financial planning can make the difference between your personal finances thriving or failing.

The heart of financial planning doesn’t have anything to do with upselling clients on various products. Instead, good financial planners care about their clients and work with them collaboratively to help them meet their financial goals. The best financial planners take a holistic approach and consider all aspects of your personal and financial life (goals, values, investments, insurance, savings, career, etc.) to set you up for success on every level, both financial and personal.

How Financial Planners Can Help Physicians

Whether you’re just starting out in your career or are an established physician with years or even decades of experience, it’s never too late to work with a financial planner and discover actual value from the interaction.

As a result of the financial quirks of their profession, which typically includes both high incomes and high student loan debt, physicians occupy a unique space when it comes to financial planning. An advisor can help walk you through the financial moves you should make now and in the future, like how to prioritize paying down debt and investing for your future, planning for a family, buying a house, and creating your dream retirement plan, among other things.

But they also provide plenty of lesser-known benefits, like psychological support and helping you to set, track, and reach specific goals. Here are a few of the intangible benefits that financial planners give physicians:

1. Clarifying Goals

While many people think of financial planners dealing primarily with investments, this isn’t the complete picture. In fact, one of the most important aspects of successful financial planning is deeply personal and involves clarifying goals, dreams, and desires for the future.

What do you want your budget to be? How aggressive should we be with paying down your student loans? How much home can you afford? Where do you plan to live? When do you want to retire? How do you envision spending retirement? All of these questions depend on your goals, values, and priorities. Whether you want to retire early, move closer to family, continue to work on the side, or save enough to afford a lavish lifestyle, your financial plan will look different depending on what you want.

Some common goals might include:

• Retiring/financial independence at a certain age
• Working part-time after retiring
• Slowing down to spend more time with family
• Moving to a dream location or closer to loved ones
• Spending more time on a passion project
• Feeling financially secure and prepared for the next step
• Making a major purchase like a new home

Here’s a sample scenario: A client wants to retire at 45 from full-time work but still work part-time until 55. They plan to spend $100,000 per year and would like to relocate to South Carolina once their kids graduate from high school. Some questions we may review with this client would be:

• How much and where are they currently saving for retirement?
• Why will the move to South Carolina enhance their life goals? What financial changes may come with the move (taxes, cost of living, etc.)?
• What type of part-time work are they interested in? Will they continue working minimally through retirement?
• How can we help them build a sustainable cash flow plan that considers expenses, taxes, inflation, and more throughout this period?

It can sometimes be challenging to get a clear picture of what your goals look like, which is why it’s essential to start thinking about them well in advance. A skilled financial planner knows that money is only one piece of the puzzle. They can also help you picture your future and clarify your goals.

2. Financial “Psychiatry” (Our psychiatry, not yours 😉)

Financial stress is no joke. It can impact your quality of life and your mental and physical health. Some common sources of financial stress include:

• Cash flow issues
• High debt levels
• Low savings
• Stock market volatility
• Limited emergency fund
• Uncertainty of the future

Skilled financial planners will listen to your sources of stress, act as a neutral third party, and provide unbiased, unemotional advice when you need it most. Financial decisions can be high-stress and high-emotion, so it’s essential to have someone in your corner who knows what to do. Additionally, when you have a financial planner on call, you’ll have someone to bounce investment or retirement questions off of and get advice from.

Plus, the earlier you set up a comprehensive financial plan, the more prepared you’ll be for whatever life throws at you.

3. Ongoing Guidance

When was the last time your financial plan had a checkup? Whether your financial circumstances have changed or you just need to change a few details, regularly reviewing and updating your financial plan is another essential service that a good financial planner provides.

For our ongoing clients, we keep a semi-annual proactive meeting schedule with our clients that serve as a regular financial checkup. Whether or not clients have already booked additional meetings to discuss specific problems, our semi-annual meetings allow us to review a client’s financial plan, make sure we’re on target, and address any changes that need to be made. Some common topics we cover include:

• Any major life changes, like marriage, children, new career opportunities, or a significant move
• Any new goals or life trajectories
• Changes to finances, like a job loss or inheritance
• Changes to spending and saving patterns
• Changes in the markets or tax code
• Updates to student loan rules

In addition to semi-annual meetings, we also offer on-call meetings whenever clients have any questions or concerns. These meetings can be as simple as a half-hour chat about their families and goals or a two-hour deep dive into their financial plan with serious course corrections. Either way, the key to a well-executed, long-term financial plan is staying in regular communication between the client and the financial advisor.

Life happens and plans change, so your financial plan should change with you. Good financial planners make it simple to keep your plan responsive and agile so that you’re ready for any next step.

4. Accountability

It’s so easy to let financial goals slide, especially if you’re dealing with hectic day-to-day concerns and don’t often have time to focus on the big picture.

When you’re pulling long hours at work, striving for a promotion, spending time with family and friends, or pursuing your hobbies, granular things like how much you’re contributing to your retirement account or updating your beneficiaries could get lost in the shuffle.

Your financial advisor can help keep you accountable and on track to reach your personal and financial goals. Financial planners take your goals seriously and work hard to help you achieve them.

Accountability can come in many shapes and sizes. It can be as simple as knowing another person is aware of your goals. That little piece of knowledge can bring extra spurts of motivation and inspiration. It’s also empowering to know that you can lean on a trusted partner. Financial planners help you follow through on your commitments, prioritize your goals, and lay out the steps to achieve your plans for the future.

5. Organization

Even if you’re already an organized person, it can be tough to keep all of your ducks in a row when it comes to financial planning. Because personal finance has both an extensive and narrow scope, it’s easy for things to fall through the cracks. Even if you have day-to-day details down like paying your bills on time, you might lose track of the bigger picture, like investing enough for retirement and your child’s college fund.

Maybe you meant to increase contributions to your employer-sponsored retirement account but never got around to it. Or perhaps you’ve been meaning to develop and stick to a better budget but haven’t found the time or motivation. Maybe you’re just having trouble keeping track of all of the various documents, accounts, and places where your hard-earned money is going.

Whatever your challenges, a financial planner can help keep you organized and make sure you stay on track. From investments to tax planning and everywhere in between, a financial planner can gather and store all relevant financial documents.

They can offer their expertise on when to make a financial decision, withdrawal, or contribution. If you have any questions along the way, you can turn to your financial planner for advice and assistance or just to refresh your memory about what it is that you’re supposed to be doing.

6. Expert Advice

We work with some of the brightest minds in medicine. Most of our clients are experts in their fields and much smarter than we are. However, we still have an edge when it comes to personal finance. Even the smartest physicians may not have the time or inclination to become an expert in financial matters, which is why we’re here to help.

It’s especially important to get expert advice regarding personal finance since one bad financial decision today can snowball into much larger financial issues quickly. The world is full of questionable financial and investment advice, which makes it necessary to have a sounding board that you can bounce ideas off of and turn to when you’re unsure what the next step is.

While much financial wisdom may sound like common sense, most times, it’s not so black and white. It’s also easy to let your emotions and biases get in the way of your financial decisions, which means that you may not be making important choices with a clear head. Expert advice from a professional financial planner can help you to gain clear-eyed insight into your financial situation and will allow you to make the financial moves that are best for your situation.

7. True Partnership

If you’re looking for a financial advisor, you may primarily be looking for someone who will tell you what to do with your money: how to save, where to invest, and how to plan for your financial future. But working with a financial advisor goes beyond just getting advice from an expert — it’s also a partnership between the advisor and the client that can potentially last for decades.

Partnership is another intangible asset that financial advisors bring to the table. When you get financial advice piecemeal from different professionals, you never form a lasting relationship with someone who understands the big picture. Instead, you work with multiple people who only have a narrow area of specialty and knowledge.

In contrast, working with a financial advisor is a collaborative process that touches on many aspects of your financial and personal life, from tax preparedness to saving for retirement to prioritizing specific goals and aspirations that are unique to you. Working with the same financial advisor for multiple years allows you to get advice from an expert who already knows you, your plans, and your trajectory. This makes them especially well-suited to setting you up for long-term financial success.

Working with a Financial Planner

There are many other intangible benefits that financial planners can provide. Good financial planning can affect many disparate areas of your life, from work to finances to your personal life and everywhere in between. Having someone in your corner who is dedicated to staying on top of your financial plan can be extremely beneficial no matter what your financial situation is.

You may want to hire a financial planner to help you:

• Make financial decisions surrounding investing, insurance, and more
• Clarify your goals, aspirations, and plans for the future
• Act as a neutral, experienced third party when emotions are high
• Provide support and guide your financial journey for decades
• Hold you accountable to make sure you’re working toward your goals
• Prevent you from making costly financial mistakes
• Serve as a sounding board for financial questions, dilemmas, and issues
• Get a big picture view of your finances and how they affect you personally

No matter your financial situation or your goals and dreams, an experienced financial advisor can help you develop an actionable plan. One of the most significant intangible benefits of a financial advisor is that they turn finances, which can be confusing and stressful for the inexperienced, into an area where you can feel confident and reassured that everything is going according to plan.

 

If you have more questions about financial planning, check out our free eBook, A Doctor’s Prescription to Comprehensive Financial Wellness, where we cover 10 vital pieces of your financial life.

Disclosures