Ophthalmology Business talks to experienced financial planner and advisor W. Ben Utley about how physicians can find the best advisor

In today's stress-filled world, having good financial health is an important aspect of overall physical health. Finding the right advisor to achieve and maintain this is just as important as finding the right doctor. According to W. Ben Utley, C.F.P., president and founder, Physician Family Financial Advisors Inc., Eugene, Oregon, it is crucial for doctors to find a financial planner who understands their specific path in life.

"Doctors are cut from a certain fabric, they're formed in a certain crucible and that becomes part of their life," he said. "Financial planning is how to make certain things happen in your life. As a result, when you hire a financial planner, that financial planner really needs to understand physicians' lives, where they've been or where they're going."

Making a list

The first step in finding the right financial advisor is to make a credible list, Mr. Utley said. Two good places to start your search are the National Association of Personal Financial Advisors (www.napfa.org), the leading professional association of "fee-only" financial advisors, and the Financial Planners Association (www.fpanet.org), the largest membership organization for personal financial advisors in the U.S.

Mr. Utley recommended physicians start with a fee-only advisor. "A fee-only financial advisor, financial planner, investment advisor is compensated with a fee, which means that you pay him with a check, a credit card, or with authorization to deduct money out of an account; all compensation is fully disclosed and invoiced. The same way that you would pay a doctor or attorney, it's a professional fee."

Everyone else charges something that is less clear, he said. For example, they may sell a product and receive a commission. Usually when there is a commission involved, Mr. Utley said, there is a potential for conflict of interest because various products give different levels of compensation.

Searching outside one's community increases the odds of finding the most qualified advice. Many financial advisors work with clients by telephone, fax, and email on a regular basis, so distance is not a problem.

To round out your list of prospective advisors, Mr. Utley recommended contacting friends, coworkers, an accountant, and/or attorney to find financial advisors they might recommend.

Look for certification

"Beware of generic pseudo-credentials like 'financial advisor,' 'financial consultant,' 'wealth manager,' and even 'vice president,'" Mr. Utley warned. These merely signify that an advisor is in the business and may have a license to operate.

"While most licenses require an advisor to pay a fee and pass an exam, these may be easily acquired with a minimal commitment of time and effort," he said. "In contrast, certifications usually require a higher level of commitment and dedication. Formal training, rigorous examination, continuing education, years of experience, and oversight by a board or governing body are part of attaining and keeping a certificate, so certification is an outward indicator of the quality of advice you may receive."

Prospective advisors on your list should at least be certified as a Chartered Financial Analyst (CFA) or Certified Financial Planner (CFP). CFAs may delve into matters of personal finance, Mr. Utley said, but most specialize in the management of investment portfolios. He recommended that physicians with large portfolios consider seeking the advice of a CFA.

The CFP mark is the most sought-after credential among advisors who practice financial planning, Mr. Utley said.

"If you need help with more than one issue in your financial life or if you are targeting long-term goals like retirement or college education, make sure a CFP is on your list," he said.

Do a phone interview

Mr. Utley recommended making a preliminary phone call to ask some key questions that may help narrow your list of possible candidates.

1) Who will you be working for when you serve me?

"If your advisor is a 'registered representative' then he owes his first duty to the company that employs him, not you," Mr. Utley said. However, if your advisor is a fiduciary, he owes his first duty to you by law. A fiduciary will offer you an Investment Advisor Disclosure Brochure before allowing you to hire him. Most fiduciaries also use a contract or engagement letter to form a business relationship with you, he said.

2) Do you work for people like me?

Find out if he specializes in working with M.D.s by asking what proportion of his clients is M.D.s, Mr. Utley advised. If you're selfemployed, find out how many M.D.s he works with who are also selfemployed. The same goes if the physician is part of a larger practice.

3) How long have you been in business?

There's no substitute for experience. Look for at least 10 years of experience when seeking advice, he said.

After this round of screening, make appointments to visit advisors who remain on your list, Mr. Utley said.

Find a personal match

Resist the temptation to sign up for services at the first meeting, Mr. Utley said. Instead, collect information and get a feel for how you and the advisor might work together in the long term.

He suggested a few important questions to ask:

  • What does your ideal client look like in terms of age, employment, and financial situation?
  • How does your investment and/or planning process work?
  • Who will I work withyou or an assistant?
  • What one thing do you do better than all the other financial advisors I might encounter?

"Asking these questions will tell you whether or not the advisor might do a good job of serving you," he said.

Knowing some personal details about the advisor can also help you determine if he has similar interests, priorities, and philosophies in life. Some questions include:

  • Are you married? Do you have family or children?
  • What are your interests beyond financial advising?
  • What drew you into the profession? Why did you stay?
  • What's been your best experience with a client? Your worst?
  • What do you expect from me as your client?

The final decision

After meeting potential advisors face-to-face, asking yourself these questions may help you make your final decision, Mr. Utley said.

1) How well did each financial advisor listen to me?

The hallmark of a good relationship with your financial advisor will be your ability to communicate your needs to him. This means he must do an excellent job of listening to you in order to understand how he can help. Consider the amount of time he spent listening to you versus the time he spent selling his services.

2) How clearly did each financial advisor express himself?

Even if you received the very best financial advice from your new advisor, you might not follow the advice unless you fully understand it. Consider whether or not the advisor "speaks your language." Make sure you are comfortable with his style of communication.

3) What promises did each financial advisor make?

In addition to reviewing the questions you asked in your first meeting, consider how each advisor attempted to win you as a client. Some advisors may try to dazzle you with their past performance records or wow you with the big clients they've handled. The best advisors attempt to set clear, realistic expectations about your work with them during the very first meeting. They know the foundation for a great long-term advisor/client relationship is their ability to make promises and deliver on them. Look for promises that include a clear statement of services and fees, regular contact and availability, and a duty to act in your best interest.

The financial advisor for you

Once you've decided which advisor to hire, Mr. Utley said you will realize what good financial advisors already know to be true: The financial advisor you choose may be a lot like you.

"People have a natural tendency to trust others who are much like themselves, so the advisor you choose will likely share your interests, your outlook, your beliefs, and even some of the same financial goals you hold. No matter which financial advisor you choose, make sure the one thing you have in common is an uncompromised interest in your financial health," he said.

Mr. Utley is president and founder of Physician Family Financial Advisors Inc., which delivers fee-only financial planning and independent investment advice to clients coast-to-coast. Contact him at 541-463-0899 or visit www.physicianfamily.com.

This article originally appeared in the June 2012 ezine of Ophthalmology Business, pages 13-15. To download a PDF version, click here.