How Financial Advisors Can Provide Value to Medical Professionals


For Canadian Doctors, the numbers 53 and 3 should be top of mind.

In 2021, the Canadian Medical Association’s National Physician Health Survey reported that 53% of physicians experienced high levels of burnout.[i]
 A 2019 whitepaper published by Vanguard entitled, “Putting a value on your value: Quantifying Advisor’s Alpha” concluded that the value (“Alpha”) a financial advisor could provide to their clients was an extra 3% per year in net returns.[i]

Burnout is a serious condition that affects many facets of one’s life. It’s clear that a majority of physicians could benefit from less stress in their lives. Utilizing a qualified financial advisor can potentially help alleviate financial stress and enable their families to live richer and freer.

Just how much is 3%?

At first glance 3% doesn’t look like much but when this is compounded over an entire career, the savings are substantial. Let’s look at an example of a 35-year-old doctor who saves $30,000 per year until retirement at age 65.

In both examples, the investor invests $900,000 over their career but in the second example at a 7% portfolio, they end up with 77% more towards retirement.

Working with a financial advisor

Planning for physicians is complex and unique. Those looking for help should consider seeking the advice of a financial advisor with the Certified Financial Planner (CFP®) designation and other specialty education. As well, working with an advisor that has extensive experience helping physicians will help investors anticipate and prepare for key considerations throughout all the stages of their careers: residency, transition to practice, incorporation, late career, and retirement.

A financial advisor who is a CFP professional won’t just focus on the investments. They will consider holistic planning and will be well versed in the following:

  • Retirement savings and retirement investment plans
  • Tax planning including incorporation
  • Risk protection and insurance
  • Cash flow and budgeting
  • Debt management and repayment strategies
  • Education savings for children / grandchildren
  • Estate and trust planning

Conclusion

Physicians as a group are among the most intelligent and dedicated individuals. While financial planning is something some may do for themselves, it takes considerable time, motivation, and resources. As physicians also generally do not pursue continuing education in financial planning, this also leaves room for error.

The option to delegate the challenging financial decisions to a professional may provide physicians with more time and mental capacity to spend with patients and more time to enjoy with their families. They will certainly still experience stress in their lives, but financial stress will likely play a lesser role in this.

By Laura De Sousa CFP, CIM, FMA | Kerry Foord CIM®, CFP, FMA | Christopher Warner FCSI, CIM, CFP, PFP


This material contains the current opinions of the author and such opinions are subject to change without notice. This material is distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Nicola Wealth is registered as a Portfolio Manager, Exempt Market Dealer and Investment Fund Manager with the required securities commissions.