Spectrem’s new Professional Profile Series breaks down the quantitative differences between doctors, lawyers and accountants, comparing each segment to all other investors regarding their investment attitudes and behaviors.
But the series also asks many open-ended questions, and reports the responses these professionals provided regarding their investments and the professional advisors who assist them with their portfolio.
The responses from doctors is not overwhelmingly positive. In some cases, it is not at all positive.
“The interviews we do with investors provides them the opportunity to explain the reasons behind their answers to our survey questions,’’ said Spectrem president George H. Walper Jr. “It is one thing to say you are satisfied with your financial advisor, and it is another thing to explain what makes you satisfied. It is in the answers about their dissatisfaction that the real value comes out.”
Seventy-nine percent of doctors use an advisor, but that climbs to 83 percent of doctors with a net worth over $5 million. However, only 69 percent of doctors report overall satisfaction with their advisor, and only 61 percent are satisfied with the performance of their advisor. Both of those percentages are notably lower than opinions expressed by all investors.
Asked to describe the advice they have received from advisors, there was obviously a mix of answers, but the unhappy investors were clear they were not pleased.
“I’m not sure my return on my accounts managed by the advisor are better or even as good as returns on my work plan retirement savings accounts,’’ said one doctor.
“Very poor service after the sale,’’ said another doctor. “He was supposed to be available for advice on investment of the fund indefinitely.”
The opinion of doctors regarding the services of their advisor may be colored by the fact that doctors are likely to have large expectations of the professionals they work with. After all, their patients are likely to expect a very high level of professional service from their doctor; doctors are likely to expect the same from their financial advisor.
“I am very knowledgeable about orthopedic surgery,’’ said one doctor. “I expect financial advisors to be very expert. That’s why I let them run the accounts and make suggestions and track things. That is my expectation of my advisor.”
Another factor affecting the relationship between doctors and their financial advisors is that doctors often do not have the time to worry about their investments, which is why they rely so much on their advisors. Almost 40 percent of doctors consider themselves to be Advisor-Assisted or Advisor-Dependent investors, with a heavy reliance on their advisor, and most of those indicate that their reliance is a matter of time management.
“Like most physicians, I am too busy working, and only look at (his portfolio) infrequently,’’ said one doctor.
“Lack of time/knowledge to manage my own accounts,’’ said another doctor. “I need to diversify, which I didn’t really know how to do, and I need help for my goals.”
“As a surgeon, I am very busy during the day and don’t have time to do the minute-to-minute research or adjustments,’’ another doctor said.
Doctors are obviously desirable clients. But they acquired their wealth after years of paying for their own extended education, and take their investments and portfolio status seriously. They use advisors but have great expectations in terms of the care and service their investments receive, just as their patients have similar expectations of their doctors.
“I have experience in what I do,’’ said one doctor. “They have experience in what they do.”
©2017 Spectrem Group