Selecting Your Dream Financial Advisor

Physician trainees are increasingly targeted by financial professionals.  There are several reasons why we are an attractive demographic to the financial services industry:

  1. We have a poor understanding of finances due to lack of time, therefore in need for financial advice.
  2. We have high future earning potential and presumably will have disposable income for financial products and services.
  3. We are incredibly loyal - just think of that physician you know who only prescribes one brand of statins.

And unless you have an excessive amount of free time (unlikely) or a burning desire to learn about managing your money (that's me), you can benefit from a personal financial advisor.  The real question is - how do you pick one?


The world of personal finance is vastly complex and will gobble up your time and attention if you let it.  Unless you are inclined to learn about all things financial, you should start thinking about outsourcing that task.  Which is to say - there really isn't a bad time to start thinking about it.  


This is the most common question I get on picking a professional financial advisor.  I recommend word-of-mouth first.  If you have family or friends who has a financial advisor they love, start there.  If you don't, start by going to The National Association of Professional Financial Advisors (NAPFA) and Garrett Planning Network.  From there, you can simply punch in your zip code to see which financial advisors are around you.  When you've gathered a list of potential candidates, run the list through SEC's Investment Adviser Public Disclosure (IAPD) site to see if there are any red flags.  This will help you narrow down your list.  Once you have the "short list" of candidates ready,  it's time to move onto the "dating" stage of your relationship.  

"THE Interview"

Much like when you interviewed for medical school, residency, fellowship or any other job.  The goal here to get an idea of whether of not the candidate is a good match for you.  While your final decision will likely be made by "gut feel" in the end, there are some good questions to ask:

  1. "What services do you provide?"  Some advisors provide a one-stop shop for all your financial needs: investment management, tax planning, retirement planning, estate planning, asset protection etc.  While others may specialize in certain aspects over others.  Obviously you would not want to pay for services on which you are already an expert on.  
  2. "How do you get paid?" The two most common ways advisors gets paid are "fee-based" and "commission-based."  In reality, most advisors will generate revenue via both.  "Fee-based" meaning you pay a flat-fee for financial advice.  "Commission-based" meaning they get a percentage of your assets under management or a commission when they sell you a product, e.g. Disability insurance.  Generally speaking, "Fee-based" or "Fee-only" is better.  While "commission-based" does not necessarily mean that the advisor won't have your best interest at heart, it does confound matters by providing some conflicting incentives.   
  3. "Are you a fiduciary?"  A fiduciary financial advisor is legally bound to put your interest above their own - similar to a physician's duty to act in a patient's best interest rather than their own.  A simple way to determine this is by asking "Are you acting under the fiduciary standard?  Will you put that in writing?"
  4. "What is your investing style?"  Active vs. passive?  Short-term vs. long-term?  While your advisor may still be able to recommend the correct investments that fit your goals, it would be much easier if your investment strategies aligned to begin with.  A simple way to find this out is by asking "How do you invest your own money?"
  5. "What are you looking for in a client?"  Any good relationship has to be agreeable to both parties.  Just like the MATCH system for residency placement, the best scenario is when requirements of both parties are met.


Finding a good personal financial advisor takes a lot of work, and just like dating, there is no guarantee the one you pick can last a lifetime no matter how much homework you did.  Hopefully this post gives you a starting point on the search for your dream personal financial advisor.  Keep in mind that above all, personal finance is "personal," so your comfort with your advisor is the most important thing.  If all else fails, go with your gut.    

Future Proof, MD

Dr. Bo Liu is an aspiring radiologist-in-training and the founder and editor of the White Coat Money Blog.  He has an interest in interventional radiology and helping his medical colleagues get ahead in this mad world of medicine and money.  When he's not crushing the list at the PACS station or typing up your next favorite blog post, you can usually find him at the local badminton club, movie theater or the most recently opened restaurant.