How a Doctor Can Tell if an Advisor is Providing the Right Financial Advice

Financial Advice

Physicians are experts in a wide variety of information. Financial matters isn’t always one of them. Because doctors often have their hands full enough doing things like saving people’s lives, it’s common for them to have an advisor to deal with money affairs.

A trusted financial advisor is an asset in many ways. Doctors can focus on treating patients and dealing with the minutiae of their work, knowing that someone else is handling the business end.

That said, the person who controls your money should never have carte blanche to run it all. It’s your money, so it’s partly your responsibility to know what’s going on with it.

If your financial advisor isn’t giving you accurate advice, it may be time to find someone new. Look for these three signs that your money expert isn’t quite as knowledgeable as they need to be to take care of your finances.

1. They Have a Conflict of Interest

This is the number one sign that your advisor may not be acting on your best interests.

There are many financial experts who work with insurance companies. That’s not a red flag in and of itself. The problem occurs when they begin to get commission to sell products that are offered by those companies.

Even if it’s the world’s most amazing product, it is still a conflict of interest if your financial advisor is trying to sell you something they have a stake in. That’s the entire definition of the term.

Your advisor should be completely unbiased and recommend products based on their relevance to you.

Another way to watch for conflicting interests is to see if they operate under the Assets Under Management (AUM) model. This sounds like a good financial strategy in theory. The advisor gets a percentage of your assets, so it behooves them to make sure you’re doing well.

The problem with this is that you have no idea how much you’re paying your advisor to do their job. It may end up costing you millions of dollars by the time you start paying attention to what they’ve slid out from your assets, completely legally.

2. They Won’t Sign a Fiduciary Contract

As a professional, your financial advisor is trained in helping you devise and carry out your budget and goal-setting. But you should be the one controlling the strings.

When you’re looking for financial advice for something here and there, anyone who knows the niche you need will work. If, on the other hand, you need someone to take over paying your bills, investing your money, and handling your budget regularly, a fee-only advisor is necessary.

Fee-only advisors don’t sell anything on commission. They act as a fiduciary financial advisor. This is someone in whom you have given the total responsibility of your assets and liabilities to legally. With this much control, it’s not unreasonable for you to request them to sign a contract.

Fiduciary advisors are ethically bound to put their clients’ best interests over their own. Without a contract to be upheld to, a less ethical advisor may decide to make movements with your money that benefit them, not you.

Speak with your attorney about drawing up a fiduciary/client contract before you give control of your finances to anyone.

3. They Make Flawed Recommendations

Sometimes, a financial advisor is going to make a mistake that costs you money. If this happens occasionally, like a stock market investment that ends up tanking, chalk it up to life.

If it’s a regular problem, though, your advisor is not acting in your best interests.

Financial advisors should also be able to recommend insurance and other products that are relevant to you. For instance, whole life insurance plans will net a commission-based advisor a hefty payday.

Whole life premiums are expensive, though, and not recommended for physicians. Instead, term-life insurance is a better security blanket for the “just in case” needs.

The extra money you didn’t spend on your whole life premiums can be invested more smartly into your portfolio to prepare you for retirement.


So you like your financial advisor and they seem like they have a lot in common with you. Do you really want to trust them with all your assets based on their personality?

Even if they’re the sweetest, kindest person you know, they need to have a head for money. These tips will help you decide if your advisor is worth the trust they want you to place in their hands, or if you need to keep shopping.