Financial Planning

Navigating the World of Financial Advice


By Bill Martin, CFA

Published May 02, 2024

When it comes to doctors’ wealth, there’s a whole world of advisors vying for your attention. Understanding the different types of financial professionals and the value they offer can help you cut through the noise.

The right team of advisors can help you achieve your financial goals, make confident career decisions, and even retire early. 

A January 2024 survey by Earned Wealth and Physician on Fire found that:

  • 70% of doctors surveyed used tax preparers. 

  • 48% of those surveyed used trust and estate planners.

  • More than a third of doctors surveyed used other types of professional advisors, such as investment managers or financial planners. 

Here's your guide to the different types of advisors, what they're best suited for, and nuances to be aware of:

Tax preparers vs. tax planners

Tax preparers are the people you'd think of come tax season – professionals who specialize in preparing returns. They may be accountants, enrolled agents (EAs), or certified public accountants (CPAs). Tax preparers help ensure you're compliant with tax laws and regulations as an individual or as a business. They can guide you on ways to structure your practice or personal finances to reduce how much you owe in taxes.

Tax planners are another way to describe wealth managers with tax planning expertise who can help you chart a course to achieve your financial goals and lower your taxes throughout the year and over the long term. Not all wealth managers offer this service.

You've probably used a tax preparer at some point, but you may not have considered the benefits of having a tax planner. The key difference is that you don't just turn to your planner during tax season. 

Since wealth managers have a holistic view of your finances, they partner with you to develop strategies tailored to your goals and risk tolerance, including ways to optimize your taxes, make tax-smart investing choices, and plan for goals like career transitions, side hustles, and retirement.  "In addition, some wealth managers like Earned help implement tax optimization strategies like Roth conversions, backdoor Roths, tax-smart withdrawals, retirement planning, etc.  They may or may not be Certified Financial Planners (CFPs), which means they have to meet requirements set by the CFP Board of Standards. 

Tip: Check that your wealth manager or planner is a fiduciary, which means they're obligated to give you financial advice that puts your best interests first. Advisors who are not fiduciaries may receive commissions for the products or services they recommend.

Trust and estate planners

An estate lawyer helps you create a plan for the distribution of your assets and provide for your loved ones in case something happens to you. 

As a doctor, you already face unique challenges when it comes to estate and trust planning. The wealth accumulation timeline for doctors is different from other professions. Depending on your income level, you may have to pay estate taxes, for example. Or you may have other factors that need to be taken into account, such as having unlimited personal liability for medical malpractice, or owning a practice.

Your estate lawyer should ideally be well-versed in the issues doctors encounter and help you design a plan that protects and transfers your assets efficiently, ensuring the smooth transition of wealth from one generation to the next. 

Finding a lawyer who is familiar with the world of doctors may not always be easy. That's when a good wealth manager is invaluable. They can review your existing estate plan, suggest ways to connect it to your financial goals and keep the plan updated as your life situation and assets change.  While wealth managers can do trust and estate planning without being a lawyer, they do, however, need an estate planning attorney to draft the legal documents.  Furthermore, wealth managers can help build a financial plan for heirs that minimizes taxes, manages those assets placed in the trust/estate, and also reviews and visualizes your current estate plan to make it easy to understand and connect to your financial goals. 

Portfolio and investment managers 

The role of a portfolio or investment manager is different from a wealth manager. Understanding what an investment manager does compared with the services a wealth manager offers can be confusing because there isn't one agreed-upon definition. However, many wealth advisors provide basic investment management services, such as building and managing client portfolios.

On the other hand, portfolio or investment managers focus on creating investment portfolios tailored to your objectives and risk tolerance. They analyze market trends, assess new investment opportunities, and construct diversified portfolios to optimize returns and weather volatility. 

Earned's survey found that doctors were hungry for alternate ways to invest their hard-earned money. Aside from retirement and brokerage accounts, real estate, REITs, and private equity were alternate investment vehicles. 

An investment or portfolio manager is someone who can help you sift through all the options and tell you where to direct your dollars based on your goals. Many wealth managers also offer an investment management service, and they can suggest the right mix of assets based on your overall financial picture. 

Insurance advisors or brokers 

An insurance advisor or insurance broker helps individuals and businesses assess their insurance needs and identify suitable coverage options. They can specialize in various types of insurance, including life insurance, disability insurance, health insurance, property and casualty insurance, liability insurance, and malpractice insurance.

As with estate planning, doctors have additional factors to consider while choosing insurance coverage. You may require different types of coverage depending on whether you're employed at a hospital, private practice, or work as a contractor, for example. 

You don't have to work with an insurance broker since you can shop around on your own in most cases or an employer may provide access to insurance. If you have special circumstances like running a practice, for example, an insurance advisor can guide you on the policies you should have in place and help you pick a suitable one. A good wealth manager or financial advisor should also offer this service. 

An all-in-one advisor

Now you have a better understanding of the professionals who comprise an effective advisory team.

That's why Earned is designed as a comprehensive wealth management firm for doctors, consolidating multiple financial services under one roof. We offer fiduciary wealth management services, financial planning, investing,  tax planning, estate plan reviews, insurance solutions, career advisory services, and more. 






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