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.