Wealth Creation and Preservation for Physicians

Sand Dollar MD Planning

Although Detlefsen Nel & Associates have clients from many different walks of life, we have developed a unique understanding of wealth preservation planning for physicians. In working with members of this profession, we have accumulated a wealth of experience, and in thinking about the challenges facing our physician clients we have conducted research into the financial planning issues that are specific to their profession.

Detlefsen Nel & Associates specializes in helping clients protect their assets while seeking the growth they need from their investments. However, when it comes to physicians we have found a need for a broader application of our investment philosophy. Over the past two decades the financial rewards of being a physician have considerably diminished. In all likelihood this trend will continue. Physicians of all specialties face a dual challenge in terms of their finances - building wealth, and preserving their wealth. It is this latter challenge that sets our physician clients apart from other investors. Not only do physicians face the risks associated with investing, but they also face very significant non-investment risks to their wealth. These risks are specific to their profession, necessitating us to incorporate these risks into our investment consulting for physicians.

We have identified three sources of profession specific non-investment financial risks with which physicians have to contend:

  • Non-malpractice litigations in the form of ex-business associates and ex-spouses.
  • Medical malpractice law suits.
  • Increasing operational costs in running medical practices.

Prince et al* have performed a national survey of 941 "affluent physicians" regarding a wide range of financial planning issues. The authors of the study identified four principal sources of financial dissatisfaction among the participants:

  • Rules and regulations that negatively affect the profitability of medical practices.
  • Excessive and increasing liability.
  • Downward pressure on incomes.
  • Fear of loss of wealth.

The above sources of dissatisfaction can all fit into the three sources of profession specific non-investment financial risks we have identified. The authors of the referenced study make the following compelling point:

"It has taken [affluent] physicians years of hard work and often a little luck to achieve their current level of economic success. Furthermore, they realize they lack the time and in many cases, the energies, to recoup their wealth given a significant reversal of fortune. For most of them, today's medical environment also works against them in rebuilding their wealth if it was indeed lost. Additionally, they strongly prefer not to be forced to downgrade their present lifestyles. Put all this together and we find these affluent physicians are forcefully motivated to take steps to preserve the wealth that supports their way of life."

What is Sand Dollar MD Planning?

Our investment philosophy is "asset protection while seeking growth" and Sand Dollar MD Planning entails the use of innovative financial strategies and products to help physicians achieve their goals while protecting their wealth. Our approach consists of three main components:

  • Wealth Creation - of which investment strategies and retirement planning, deferred compensation programs, and contingent swaps to convert income into gains are important sub-components.
  • Estate Planning - of which the creation and funding of trusts, legacy planning and charitable giving are important sub-components.
  • Asset-Protection Strategies - of which transformative strategies like forms of ownership, practice restructuring, trusts, and insurance are important sub-components.

Detlefsen Nel & Associates is uniquely positioned to work in conjunction with our professional partners to assist physicians in building and preserving their wealth.

* "Wealth Preservation for Physicians: Advanced Planning for Affluent Doctors." Russ Alan Prince, Gary L. Rathbun, and Arthur A. Bavelas. Wealth Management Press. 2006