* Physicians need assets protected from malpractice claims
* Advisers say physicians are usually loyal clients
* Advisers need to be flexible about client meetings
NEW YORK, May 19 (Reuters) - U.S. physicians are dealing with an uncertain future as healthcare reform unfolds and income tax rates are poised to rise, creating an opportunity for financial advisers to build a business working with doctors.
Advisers who dispense advice to physicians stress three keys: meet the doctors early in their careers, accommodate to their busy schedules, and protect their wealth from possible malpractice claims.
Ben Utley, founder of Eugene, Oregon-based Physician Family Financial Advisers, said he approaches most of his clients while they are still training and have “negative net worth.” His efforts pay off later when their incomes rise, he said.
Speaking to trainee doctors at a local hospital, advisers can address financial issues such as managing student loans.
“They don’t have time to go shopping around for an adviser,” Utley said. “If they start with an adviser when they’re young, they’ll usually only leave him if he goes out of business or abuses them.”
Time constraints dictate the nature of the adviser-client relationship, he added. Utley started out scheduling four meetings a year with each client, but scaled it back to one. And some clients think even that is too much.
“They don’t have time to meet, so I’ve learned there’s nothing I can do in a meeting that I can’t do over the phone or by email or fax,” he said.
Ray Paprocki, co-founder of Chicago-based Mediqus Asset Advisors, said he makes himself available for clients.
“We work crazy hours because they work crazy hours. We’re on call like they are,” said Paprocki, whose practice oversees $450 million in assets.
One big concern for physicians is protecting assets from malpractice claims. Physicians need to have good malpractice insurance, and must take steps to protect assets before any claims are made, say advisers.
In some states, married couples can own their primary residence and other assets, such as brokerage accounts, as “tenancy by the entirety.”
This means there would have to be a judgment against both spouses for these assets to be taken by a creditor, said Thomas Foster, an attorney at Richmond, Virginia-based McCandlish Holton.
Foster also recommends that physicians make maximum contributions to retirement accounts such as 401(k)s and IRAs, which are typically beyond the reach of creditors.
Cameron Short, a Pittsburgh-based adviser with Stifel Nicolaus, said one of the most important things he can do for his physician clients is to make sure they have good disability insurance.
It should include “own occupation” coverage, which means the physician will be paid if he can no longer practice his specialty, rather than if he cannot work at all.
“Physicians spend a heck of a lot of time building their wealth. We have to make sure important details aren’t neglected,” said Short, who oversees $250 million in client assets with his three partners.
Advisers say they must also protect clients by stressing the importance of budgeting, setting aside retirement assets, creating a sound investment plan, and being selective about the many requests they receive for money.
“We’ve been advising doctors for over 25 years and we’ve seen their reimbursement go down and their fixed costs go up,” said Paprocki. “Right now, we just need to protect their assets.” (Reporting by Helen Kearney; editing by John Wallace)
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