When medical science does research, it often does so to prove a point: that a certain medicine works as prescribed, that certain illnesses attack different segments of the population, that diet does affect health, that sort of thing.
When Spectrem does research on wealthy investors, it does so with an open mind. The research drives the information it reports.
Spectrem’s research into the differences in investors based on occupation has always been one of our most interesting cuts. In fact, over the years, the most popular occupations have changed, so that now educators and investors in the field of information technology are much more prevalent in our research.
One category of investors we created places doctors, accountants and lawyers into one group we call Professionals. While it is true those investors do have like interests in most areas of investment strategy and education, we felt it was significant to separate them in our new Professional Series of studies, where we look at each occupation separately. The study includes interviews with doctors discussing their investment strategies, relationships with advisors and plans for their financial future.
The first in the series we will produce is about doctors. Even that is a broad category, since there as many different kinds of doctors as there are parts of the body. Back in the day, you might have gone to see an ear, nose and throat physician, but today each of those body parts has its own specialist.
Still, all doctors go through years and perhaps a decade of training before they can hang their shingle and start making money. This extended training period could place a person in severe debt due to educational loans; the doctors surveyed for our studies have worked their way out of those liabilities but probably remember a time when they were not affluent.
As a result, doctors are likely going to be careful, well-educated investors. Our research indicates they are more likely than investors from other occupations to use financial advisors, and they state their respect for those people who know more about the subject than they do.
According to the Doctors study, 79 percent use a professional advisor, and that is far above the percentage of all investors. For instance, Spectrem research shows that only 64 percent of Millionaires with a net worth between 41 million and $5 million use advisors, and only 69 percent of Ultra High Net Worth investor with a net worth between $5 million and $25 million do so.
Doctors use advisors, and have high expectations for their performance and service.
“I am very knowledgeable about orthopedic surgery,’’ one doctor said in the report. “They are experts at what they do and that’s why I let them run the accounts and make suggestions and track things. That is my expectation of my advisor.”
If you have ever suffered from a long wait to get a doctor’s appointment or to see a doctor once you are his office, you know that physicians are very busy people. Our research indicates that their tight schedule makes doctors less likely get to deeply involved in investing, preferring instead to turn their portfolio and investment preferences over to an advisor.
“I have a lack of time or knowledge to manage my own accounts,’’ one doctor said. “I need to diversify, which I don’t really know how to do, and need help to reach my goals.”
Physicians are likely to be both lucrative clients and challenging ones. They are willing to let advisors handle their affairs, and will do so with a minimum of interference, but are just as likely to carefully watch what an advisor does for them and demand accountability for results.
Our Professional Series moves on to Lawyers next, and then Accountants. Can you imagine what our research will say about those two groups of investors?