Why having a flawed relationship with your professional advisor can set you back

April 15, 2005

It is quite common that a physician stays with an advisor even though the doctor has clearly outgrown the expertise of the advisor.

It is not surprising that physicians do not get the value they should out of their professional advisors. While the typical specialty physician has nearly 25,000 hours of training in his/her profession, there is little time for training in business or financial issues related to the "business" of being a doctor.

This article will attempt to point out the common flaws in physician-advisor relationships. This article also will explain how to remedy these problems, so one can move toward goals of minimum lawsuit and tax exposure and maximum peace of mind.

Most doctors choose their advisors when they are in residency or fellowship because this is the time when most doctors begin to make money or have a family. The doctors may need some life or disability insurance, a will, and someone to prepare and file tax returns. Working long ho urs and without any financial training or the means to evaluate an advisor, doctors typically do what other busy people do and take the path of least resistance (and least amount of time commitment)-they use the advisor the older residents use, find someone the local medical society recommends, or hire a friend or family member.

Though this approach is obviously flawed, it serves its purpose when there are bigger challenges at hand (like 20-hour work days, graduation, and finding a job). Your life is so hectic- you just need to "get it done fast." The advisor you choose at this point simply has to be decent and cheap and that is good enough. Like a triage nurse in an emergency room, a top-trained specialist is not necessary, when all you need are some basic stitches. This is, in fact, quite understandable.

What is so alarming is not this initial choice of advisor, but rather the fact that most physicians actually stay with the same advisors who handled their "triage" planning in residency for the rest of their careers. The typical justification for this is rarely anything concrete or acceptable. Answers like "We have been together so long, I'd hate to change now" or "If it ain't broke, don't fix it" are not persuasive. Further, this begs the question-how do you know "it ain't broke?" if you don't get a second opinion?

It is quite common when a physician stays with an advisor even though the doctor has clearly outgrown the expertise of the advisor. Consider the following real-life example.

Oscar, an orthopedic surgeon living in Nevada, contacted me after reading my book. While his income was more than $1 million per year and he was part of an extremely successful practice, he used the same New York-based lawyer who had created his wills 10 years ago when he was a resident. When I relocated from California to New York, I had a meeting with this attorney.