Blog - Dealing With Doctors: How to meet the demands of one of the most demanding clients


Doctors are desirable clients for financial advisors and their firms.  To successfully develop relationships with doctors and to meet their demands can, however, be difficult.  As individuals who spent up to 10 years just educating themselves to begin their careers, failing to be an expert in your own field will quickly delete their confidence in your advice. 

In focus groups held with doctors in the past, Spectrem specifically remembers a doctor who described her expectations of an advisor as follows:       

When I tell a patient that they have cancer, I know at the next meeting they will have scoured the internet for everything they can about that type of cancer, its treatment and various outcomes.  I need to pull together a team to answer any question they might pose.  This is their life.  Now, while someone’s life is more important than money, it can be a close second.  When I meet with my advisor and he or she is advocating a specific investment, I expect his or her knowledge to be as in-depth as mine was about the cancer diagnosis I may have given to a family.”

Therefore, the number one rule in dealing with your doctor clients is “be prepared”.  Know everything about the recommendations that you may be giving them and why it is the right choice for them.  Discuss why it fits in their portfolio, the tax implications and the long-term outcome on their investments and their life.  Also be able to compare it to other similar investments.  Know the background of the company or the fund and be able to discuss why the investment is expected to grow.  Meeting with doctors should be a little like a short college thesis.  Hit the important points clearly and succinctly.

There are multiple other issues advisors should consider when dealing with doctors.  Based on Spectrem’s recent research specifically with doctors, we found the following:

1.      Doctors are more likely than other professions to live in a single income household and to delegate decision-making authority to the husband.  Now this may somewhat be related to the fact that the average age of doctors is older than the average age of other wealthy households (66 vs. 61), however, it is important to remember when working with doctors regarding financial planning and retirement planning.  Keep both spouses involved just to ensure that upon a catastrophic event you are able to effectively assist the surviving spouse.  Additionally, most households today are joint decision-making households and generally male respondents are the ones indicating that they are the decision-makers.  Younger doctors have different attitudes.

2.      Doctors may have a multitude of employer retirement plans or none at all.  Due to the complexity of the medical industry, doctors rarely have only a retirement plan funded by their employer.  They may have plans that are part of a practice to which they belong as well as a plan through various hospitals with whom they are affiliated.  Perhaps they created a solo defined benefit plan when they were on their own or they may also have a plan with a university if they are in a teaching hospital.  Walk through the various plans your doctor client is participating in and ask for any documentation that is available.  This will help you to understand what is available to them as a retirement income stream.  You may be able to recommend various types of additional retirement plan opportunities based upon the structure of the practice (or multiple practices) in which they participate.  Bring retirement plan experts into your meetings to ensure you have reviewed all potential opportunities.  This is what a doctor will be expecting from you.

3.      Doctors are likely to own investment real estate or part of a small company.  When meeting with your doctor clients, be sure to ask about investments they may have outside of your relationship.  In many cases, a doctor group will purchase the real estate in which they have their practice.  Additionally, business associates may have asked them to invest in various real estate opportunities or start-up opportunities.  Especially in communities in which there is a university or teaching hospital, doctors are asked to become involved in various new drugs or products, often as part of their contracts.  Make yourself aware of all of the investments in a doctor’s portfolio as you work to develop a comprehensive plan.  Income from real estate may be part of their future income stream.

4.  Doctors want immediate responses to their questions.  While you may have had to sit in waiting rooms multiple times when you were sick, doctors are not willing to wait for you.  Some of this may be due to the demanding nature of their practices.  While doctors, similar to other wealthy clients, are happy meeting with you face-to-face once or twice a year, they are more demanding about how quickly you should respond to their phone messages, email or texts.  The old “sundown” rule doesn’t work with doctors.  Get back to them as soon as possible to avoid their ire.

Keep in mind that Spectrem’s research indicates that doctors are generally less satisfied with their financial advisor than other investors.  They are also less likely to recommend their advisor to their peers.  That being said, most doctors find their advisors based on recommendations from their business associates.

When doctors are asked why they are not satisfied with their advisor, the most common response is “knowledge and expertise”.  As mentioned earlier, the most important way for you to be successful with your doctor clients or prospects harkens back to the old Boy Scout motto…”Be Prepared.”