Your specialty-specific professional society and more general physician groups such as the American Medical Association will occasionally send you solicitations in their name for insurance or investing products. You need to beware of these solicitations just as much as you would any other solicitation. Remember that any time money changes hands there are conflicts of interest. A recent email from a reader illustrates this point well:
I belong to the AAFP, the American Academy of Family Practice….every year, they mail members about their “perfect for doctors” retirement program sponsored through AXA Ameriprise. One year I replied to [it and discovered that] AXA offers a ‘group annuity' retirement plan.
I read all the info they sent me. What a crock of crap ! Accordingly, I wrote the leadership of the AAFP a couple of long letters about my misgivings of this program and what a disservice they were doing for their membership in offering it and especially promoting it. I even spoke directly to a couple of board members by phone. I thought they would welcome an honest opinion about AXA and their group annuities.
Sad to say, I got nowhere ! They told me their executive board had looked carefully into AXA and found them to be by far the best choice available to them. I then asked them if AXA paid the AAFP for their endorsement. Without embarrassement or guilt, they replied …yes! I know had I not been…'financially' informed, I might have fallen for this hogwash.
For those who aren't aware, most annuities are a poor choice for investors as their costs generally far outweigh their benefits. AXA is a high-cost financial services company that generally places its investors into high-cost products such as loaded mutual funds with high expense ratios. They don't have a place on the very short list of “the good guys in finance and investing.”
This example illustrates two things. First, what is good for your specialty society is not necessarily good for you. The fact that you pay $400-1000 a year in dues doesn't seem to matter to those you've elected. Financial firms are quite used to paying kickbacks and “pay to play” fees to business to get their mutual funds into 401Ks. Similar arrangements with medical societies are just business to them. Doctors can't accept drug company money anymore, but many are still willing to sell out their colleagues for a few bucks or gifts for themselves or the society. Second, as we saw in the post about Stupid Doctor Tricks, the average physician isn't particularly financially astute. Many of the docs running the societies are salaried academicians who have never run a business, much less had significant formal or informal financial training. In the AAFP example above, I suspect some of the board members actually believed they were helping the academy members.
Just because a solicitation comes from your medical society doesn't necessarily mean it isn't a good deal, or even the best deal for you. But the fact that ACP, ACS, or ACOG endorses a product doesn't mean you should do any less due diligence before buying than you would if you had the product recommended to you by a door-knocking penny stock salesman.
sometimes the referal is useful: my “hospital group” also recommended axa. previously i had disability ins as a resident (pgy2) thru northwestern and i thought it was great. I was uneducated and stupid. Due to a military clause I was paying close to 1000 a year for 1000/month of ins. I finally woke up, went to axa and of course they denouced northwestern. AXA was able to find me a policy through met life. Now there are some negatives: 1) northwestern gives divedends and met life is for profit. 2) my disability is on hold when I am on active duty. Now here is the positive: after I leave the US military, I contact met life, show them my papers, and its reinstated without a physical. I think considering the situation that is a very good policy FOR ME.
Lesson for readers: learn as much as you can, learn what is good for you and it could be from a company like axa or not, but before you buy RESEARCH!
Yes, do your research before you purchase anything from an association. In some cases, the value and savings are there and in other cases it is not.
For example, many medical associations offer a “group” type of disability insurance policy that is initially inexpensive but is also riddled with loopholes to prevent you from collecting benefits.
However, in some cases, you can purchase an individual policy at a 10-15% discount. This is the same policy that you would have purchased individually without the discount so the value and benefit of being an association member is worthwhile in cases such as this.
That is awesome: The author of the email actually called out the AAFP, and even got in touch with the board of directors–who actually ADMITTED to the the legal but highly unethical kickback. Endorsing a product like that really should be decried by the AAFP as a whole.
There should be more accountability by specialty societies–they are literally stealing from or ignoring problems facing their brothers and sisters in medicine. While many things they do are good, they need to step it up. It is really really disappointing to hear that situations like the above one exist. And yes, I get the letters from AMA insurance companies every month. I wonder how they would compare with the general market.
I am personally very frustrated with how our current AMA and AAOS (for me) are managing the SGR issue. They are trying to put a band aid on a giant laceration of diminishing compensation due to ignorance of the effects of inflation. Getting paid the about same for the same office visit or surgery today as in 2030 will be a losing cause for the patient and my practice (yes, I am aware of the 0.5% increases for 5 years, which is well below usual inflation). I hope that more docs like the email’s author (myself maybe) will help to air more of these unethical issues and actually advocate for patients and physicians.
I wish this post got more traction and comments too. It is really interesting who the “scammers” can be. I guess it was from 2011, when the website had less traffic.
Thank you, Jim, for posting this. I can’t tell you how thankful I am for your site and your work educating physicians and all people about topics like this!!
Hi WCI,
I recently had a financial adviser contact me to set up a meeting after attending an educational seminar for new physicians. Upon meeting with this adviser, he stated that they were endorsed by the AMA. Adviser seemed competent, and the firm is very professional with several offices located in two major cities’ medical centers here in TX. My question is, does the AMA actually endorse financial advisers? Or do the advisers pay the AMA to be affiliated? Do medical professional organizations like the AMA endorse certain financial advisers because of their specialty in working with physicians or is this just a financial advisers way of making me feel better about using them?
A good chunk is certainly marketing. I would not put any weight on an endorsement from the AMA. Do your own due diligence on the advisor. Know how you pay him and how much. Know what services you want and what you don’t care about. Know what a fair price is. Know what good advice looks like.
https://www.whitecoatinvestor.com/the-perfect-financial-advisor/