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The financial advisor who uses a financial advisor

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  • Avatar Steven Podnos MD CFP 
    Participant
    Status: Physician, Financial Advisor
    Posts: 108
    Joined: 09/21/2017

    If we are talking about someone with the training to do a relatively complete financial assessment and plan, there are only three designations I can think of:

     

    CFP-

    ChFC-an old designation that is rarely used

    CPA/PFS-that is, accountants that have studied some financial planning as well.

     

    MBA (I have one), and CFA really have no study of financial planning or expertise.

     

    Compensation is a crucial consideration.  Any advisor that is paid by any source outside of the client has mixed incentives.  Why start with that??

    After those considerations (that is, pick a CFP or CPA/PFS that is fee only), it is a matter of other’s recommendations and your own assessment of “fit” from an interview (just as in medicine).

    #164217 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 6902
    Joined: 01/09/2016
    In healthcare a patient typically sees a PCP, licenses and training can be verified and are easily understood by the public. Then, if needed, referrals to a specialist. Again, licenses and training aren’t difficult.

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    If this were all that was needed for a patient to know that s/he was in good hands, then there would be no need to worry about incompetent or unethical physicians because they all would have the same degree of skill, bedsides manners, and experience and that any human with a pain in his stomach and difficult bowel movements would have the exact same diagnosis and be treated in the exact same way.

    Unfortunately, it’s not that way for any professional. You would be more likely to find that level of predictability in Germany where all licenses, from painting a house to performing a medical operation are highly regulated and overseen by the government. Of course, there are trade-offs in any situation.

    Just as it is difficult for a non-physician to assess the qualities and skills of a neurosurgeon and for a non-attorney to know whether or not they have a highly-qualified attorney, so it is difficult for a person who has no financial training to assess the necessary qualities of a financial planner. I would even posit that it is easier, however, to investigate the qualifications of a financial planner thanks to forums like this and others where the topic is deeply dissected and any financial planner’s ADV can be looked up and reviewed online. What do we have for physicians other than online patient reviews, upon which I have no faith? Do doctors self-report doctors they wouldn’t send their family members to? Hardly, at least that I can tell.

    Financial advisors, FINRA, and the SEC continually report the disease carriers in our community. In fact, I think that is one reason our profession has such a stain on it – because, when we do wrong, it makes the news, and you can find multiple stories every day. We work hard to publicize the difference between fee-only and fee-based, for example. It is rarer to find stories of doctors who are dangerous until they kill someone or amputate the wrong arm. I don’t believe that incompetent doctors don’t exist until they do something horrendous that makes the news. I just believe they can hide behind those licenses on their wall.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #164224 Reply
    Liked by jacoavlu
    Avatar Kamban 
    Participant
    Status: Physician
    Posts: 2055
    Joined: 08/01/2016
    ’ve avoided for awhile starting a thread that linked to a post on my blog, but I thought this was worth a read. This is from Anjali Jariwala, who awhile back I think was somewhat unfairly put down in this forum.

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    Just FYI but your site took forever to load and after 15 seconds I gave up. Happened twice.

    #164240 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 1392
    Joined: 09/18/2018
    Just as it is difficult for a non-physician to assess the qualities and skills of a neurosurgeon and for a non-attorney to know whether or not they have a highly-qualified attorney,

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    I was not intending to slam FA’s or any professional in any sense, simply pointing out that referrals in medicine and legal specialties are very common and usually without a financial interest. A PCP can and does often provide referrals to two or three neurosurgeons. That’s a start. It is much more difficult in the FA area.

    Actually, most have their “bread and butter” clearly identified and dread taking on something outside of their “wheelhouse” in medicine and legal. For example, a tax partner in a Big Four firm has zero business taking on financial planning and or estate planning, especially is his specialty is oil and gas of the majors. However, a CFP along with his/hers CPA would give me a little comfort in the financial planning aspect. The unknown there is the investing expertise and risk management. The scope of an FA is huge and it is definately not in their self interest to refer clients to others. Some will and that is commendable.

    FYI, I am an MBA/CPA but have never practiced in tax or financial planning.

    #164273 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 6902
    Joined: 01/09/2016
    FYI, I am an MBA/CPA but have never practiced in tax or financial planning.

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    lol, I had kind of figured the first part out – have been assuming you are a hospital CFO or something similar. You know too much inside stuff, otherwise 😉 .

    I didn’t take it as a slam, just expressing that there are different perspectives. Totally agree that it’s hard to untangle all the designations – I still get them mixed up. When I first started in this business, it took me a long time to remember the difference between an RIA and an IA and what designation was important to who. Still have to look things up.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ 270-247-0555
    https://fox-cpas.com/for-doctors-only/

    #164306 Reply
    Rogue Dad, M.D. Rogue Dad, M.D. 
    Participant
    Status: Physician
    Posts: 856
    Joined: 03/07/2016
    Just FYI but your site took forever to load and after 15 seconds I gave up. Happened twice.

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    Thanks — found a couple high res images that were slowing down the site, trying to see if that fixes it.

    http://www.RogueDadMD.com

    An alt-brown look at medicine, money, faith, and family

    #164310 Reply

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