When you first start thinking about finding someone to help with your finances, it can be more challenging than you originally anticipated. Long gone are the days where you can call up the person that your parents have used for many years, or turn to your neighbor for their trusted recommendation. This is a huge decision that will affect your life for many years, but it doesn’t have to be such a complex process.
As a dentist, you have a unique set of opportunities and challenges. It takes a financial professional with the appropriate training and certifications, and it also requires someone who has experience working with other dentists and dental practice owners, who can support you through the ups and downs in your career. This person will provide guidance and advice as you make important decisions about your financial health. They will need to do things like creating a plan to address your student loan debt, devising an investment strategy for you and your specific goals, planning for a secure retirement, and developing an estate plan for your children and heirs.
Finding the right financial advisor is a crucial decision. You want someone who can provide unbiased advice, education around things you are not familiar with, and an understanding of your career path and finances, especially as you grow in your career. Most crucial, though, is finding someone who is the right fit for you and your needs.
Before you commit with anyone, it is helpful to know what your financial goals are. While there are numerous ways to measure a financial planner’s suitability, here are a few questions to ask to determine if they are the right fit for you.
As a dentist, it is essential to choose a financial planner who has experience working with other dentists and understands all of the nuances that come with that career path. The benefit you receive is unmeasurable when selecting a financial professional who has the experience to anticipate issues relevant to you and your life stage and not just what is happening at the moment.
Once you begin searching for a financial planner, especially if friends or family members know you are looking, you will receive suggestions and recommendations galore. Many of the advisors you search and meet with will have the experience that applies to the areas that most people want guidance, such as insurance, investments, budgeting, and even retirement. While this is generally helpful, your advisor also needs to have a keen understanding of issues specific to dentists. These issues include but are limited to student loan and debt management, disability and liability insurance, cash flow and debt analysis, entity structure and transition planning, insurance planning, and retirement planning optimization.
Why is working with a specialized advisor beneficial?
There is immense value in working with someone specializing in dentist-specific and practice-related issues because they have the experience to know what challenges you may encounter in your career and understand how to navigate them. Suppose a potential financial planner does not have experience with multiple dentists and other specialists at various stages in their career. In that case, it may not be the best fit even though they do a fantastic job with their general clients. Another added benefit to working with a specialized financial planner is they are familiar with working in collaboration with attorneys, accountants, and other dental industry specialists.
This is a helpful question because it will give insight into what your financial advisor is qualified to do, what they have experience in, and what is included in the fee structure. As a dentist, you will likely want an advisor who understands and has experience in both personal and practice financial concerns.
Financial planners generally work under one of three different billing methods.
The cost of working with a financial professional will vary based on their experience, where you are located, and the scope of advice you need. It can be challenging to determine whether a financial planner will be a good fit and worth the investment. Remember, a good financial planner should be able to take the stress off you and help you make informed decisions with your money.
If you are not familiar with the standard of fiduciary duty, it is a fancy way of saying that a financial advisor is legally bound to put client interests before his own.
Believe it or not, there are different requirements for financial advisors. Many of these standards include a suitability standard and a fiduciary standard.
The suitability standard is not as strict as the fiduciary standard. It only requires a broker to make recommendations that are suitable based on a client’s specific situation. It does not require that the advice is in the best interest of the client.
An advisor or planner who is a CFP (Certified Financial Planner) is held to the strict fiduciary duty standard.
First-hand, you know the importance of staying on top of the latest dental trends, discoveries, and practice management best practices, peculiarly as things change and new technologies become available. You and your team members attend training, classes, and lectures to keep your skills and certifications updated and current and best serve their clients. Well, the same principles apply to your financial planner.
One way to know if your advisor is dedicated to continuous learning is to check for advanced designations. In other words, perform a check-up on your financial professional to see what letters are behind their name. These designations or certifications are not easy to earn and keep. Initially, the designations are achieved by passing a difficult test. Then, over time advisors must keep up with continuing education to keep the designations.
A financial advisor who values staying on top of changes, trends vs. fads, and regulations may be in a better position to guide their clients because they make it a point to keep learning.
Making sure they have a guiding philosophy and straightforward process is vital. Having and sticking to a plan is essential. Without a clear investment philosophy and a consistent approach, it is easy to be swayed by different market conditions and emotional reactions. When interviewing potential advisors, you can ask them what they would do in a specific scenario to provide some examples of their thought process.
Your financial advisor should be able to share information about the process they follow to guide their clients. Think about it like this – if someone asked you this question about your dental practice, you could most likely describe in detail what they would experience. You should expect the same from your advisor.
You will want to know what is included as part of the financial planning model. How do they learn updates about your situation? What kind of reporting should you expect? How often do you need to meet with them, and will they spend time with you if something important comes up outside of that? Who do you call when you have a question?
The purpose of this question is to help you judge their level of experience and ability. Advisors who are the right fit for you will share at great length why and how they service their clients. It is important to remember that not everyone will have the same approach, which is fine, but smart advisors know why they have a process.
This question is a good segway into gauging a potential advisor’s character and what they value. When a financial professional, much like other professions, views their role as a passion and not just a job, they tend always to have energy and time to serve their clients and help them meet their goals.
Dentists like other specialists benefit when they find a financial planner that they can trust and understand their complex and nuanced financial situation. In today’s exciting and sometimes unpredictable economic environment, it is a great asset to have an advisor who has their client’s best interests at the forefront and can provide the specialized advice and guidance that meets their unique needs
At Spaugh Dameron Tenny, we believe that a sound financial plan is comprehensive and tailored to your current and prospective needs. We provide solutions in student loan consolidation, protection planning, wealth management, retirement fortification, and everything in between. Below are some of the services we provide that may be relevant to you as a dentist:
Looking for information on retirement? Don’t know where to start when planning for your retirement? Our Retirement Guide for Dentists can help! Download the guide to learn more:
For over 50 years, Spaugh Dameron Tenny has provided comprehensive financial planning for physicians and dentists in Charlotte, NC. In addition to providing personalized advice, we walk our clients through their options to help maximize finances and maintain financial security.
Securities, investment advisory and financial planning services offered through qualified Registered Representatives of MML Investors Services, LLC. Member SIPC. Supervisory office: 4350 Congress Street, Suite 300, Charlotte, NC 28209, (704) 557-9600. Spaugh Dameron Tenny is not a subsidiary or affiliate of MML Investors Services, LLC or its affiliated companies.→ Check the background of your financial professional on FINRA'S Broker check