The die was already cast a few days before, but a broad smile creased my lips. My finger poised over the send button. Beneath my gaze sat my formal resignation letter. After fifteen years, I’d had enough and was poised to chart my own course.

Click.

It was done!

And that is how I lost $67,500 in less than a minute.

Rewind eight years, and you’d find me sitting at a tiny table in a side conference room with the HR director of an expanding physician group. I don’t recall the exact number, but we were a few hundred strong and growing. I was sure this was my final contract as a physician; this was my dream job. The benefits were substantial, the group private and democratic. I was mainly in charge of my schedule and department. No more nights, weekends, or holidays.

Like illness, a career in medicine is unpredictable. A few short years later, our group was bought out, and everything changed. Control was a faded memory, and the impressive benefits package decimated.

My resolve to leave was sealed.

A few months later, I received the usual quarterly investment statement revealing my assets, along with a reminder that I would have to “do something” with these accounts, as I was no longer an employee. I contacted my existing advisor and began the process. It seemed simple – just a few signatures here and there and a quick discussion about my risk tolerance.

Then the Alphabet Issue popped up on my radar. What were these accounts with “C” and “F” attached to them? While I may know a lot about ABCD2 for Stroke or CHADS scoring, this was new territory for me. Why couldn’t I roll everything over to my new broker? What I quickly learned was painful. I was not fully vested and would have to forfeit over $67,000.

Poof…Gone forever.

Holy shit. Seriously?!?

What a painful lesson. One I never want to repeat, and one I hope you never have to face. If only I would have used a financial advisor at the start, this painful lesson could have been avoided, before plowing blindly ahead into investments I didn’t fully understand.

As physicians, we pride ourselves on our intellect and ability to master complex knowledge and hone our skills. Many of us feel we are the best to determine how to manage our financial world as well.

Consider the above as a prime case of why not.

 

Terms

I want to define a few terms and share some thoughts on how and why you must consider working with a financial expert critical to your financial health.

First, a brief discussion of the players in the game (my explanation, but do your own due diligence):

Certified Financial Planner (CFP) — Certification requires passing an exam. These professionals are bound to a code of ethics and have work experience requirements. CFPs are generally experts in estate and tax planning, insurance, and retirement planning.

Chartered Financial Analyst (CFA) — With three years experience in the field and certifying exams, these professionals can help you focus on stocks, mutual funds, bonds, and insurance.

Certified Public Accountant (CPA) — These professionals are the heavy hitters when it comes to tax planning. They have completed college programs and take a rigorous certifying exam. CPAs are essential for financial planning and business ventures.

Personal Finance Specialist (PFS) — Think of these as super CPAs who have passed additional exams. Their extensive experience can guide you through financial planning and accounting issues.

Registered Investment Advisor (RIA) — As specialists manage the assets of high net worth individuals. They also represent mutual and hedge funds, insurance companies, and can work for endowments.

Your chosen professional may hold several of these titles. We will get down to some qualifying questions shortly, but first, you may be asking how they can help you. Here are a few opportunities. If you don’t know what all entail, then that is clear signal you need guidance.

• Clarify the process
• What to look for and look out for (see my story above)
• Tax planning
• Rebalancing
• Tax-Loss Harvesting
• Estate planning
• College savings
• Long-term care planning
• Legacy creation

 

Still not convinced?  Perhaps a non-human advisor is right for you. Consider hiring a roboadvisor. I confess I use both human and an AI version based on algorithms.  A starting place might be Weathfront (my link: http://wlth.fr/1na79NV). I’m starting one for my son as a birthday gift.

This option is among the lowest cost, and their computer algorithms can deliver decent performance. I like the hybrid option of having the opportunity of a human expert to consult with when desired. You’ll have to decide what’s right for you and what risk tolerance is comfortable for you. Keep in mind, I’m a physician, and like many of you, my financial education formally ended with freshman accounting 101.

To wrap things up, I want to share a few questions you may pose to a potential advisor:

• What’s your investment philosophy?
• Educational background?
• Work experience?
• Certifications?
• What services can you provide?
• Do you work alone or are you part of a team?
• What range of portfolios do you work with? Any min/max?
• What are your fees?
• How often do you reevaluate portfolios?
• Are you paid on commission?

 

The final piece of advice is to educate yourself. While there are a ton of resources, I’m only going to suggest three:

• Unshakable (https://amzn.to/2pdgxnd)
• Wealthfront (http://wlth.fr/1na79NV)
• Schwab Robo (https://intelligent.schwab.com/public/intelligent/faq-intelligent-portfolios)

 

While it took a few years, I can now look back on my blunder and chuckle. The freedom of going it my own way was well worth it. I’d be happy to share my journey; feel free to reach out to me on social media.

Take Home:

• You are not smarter than the experts
• You do need help
• You must trust
• Do your homework