ASC physicians: How to build a personal & professional financial game plan

Are you ready for retirement? Brian P. Driscoll, Executive Director/Financial Advisor with J.P. Morgan Securities, describes the importance of a financial strategy for ambulatory surgery center physicians.

Question: Do ASC physicians generally have a comprehensive understanding of their personal and business finances?

BD: Through our extensive work with physicians, we have found that the three areas most important to them are asset protection, wealth preservation and managing risk. Given the nature of their careers, however, physicians often find themselves balancing these for their families and private practices, as well as ASC businesses. All of these areas require careful thought and planning.

We find that most physicians appreciate a comprehensive approach to making financial decisions, which encompass all of these areas. We work together to determine long-terms goals and create individualized plans to streamline financial processes and help to mitigate risks. Developing a portfolio comprising asset classes such as stocks, bonds, cash and real estate is an essential component in planning. This strategy is a dynamic process dependent on individual characteristics, including age, tax status, income requirements and risk tolerance. Asset allocation can be one of the most effective investment techniques available to increase their chance of success. By working together with a trusted advisor, these physicians can be more focused on active communication and a defined goal.

Q: When do ASC physicians need to create a financial strategy to ensure successful retirement?

BD: It is never too early to start planning. A sound retirement plan makes the most of things you can control and evaluates factors that are somewhat or completely out of your control. Working with a trusted team of financial professionals can help physicians determine their retirement goals, which often change over the course of their careers. When planning for retirement, physicians should consider how changes in healthcare, insurance and regulation can impact both their personal and professional lives. This will allow their plans to be more flexible and adapt to landscape changes.

It is also important to remember that it is never too late to start planning either. As life expectancies continue to rise, so does the risk of outliving retirement assets.  With the probability of living longer, perhaps 30-plus years in retirement, planning becomes a critical component. When starting a medical career, many face the cost of school loans and practice costs, and retirement can seem very far off. Even if a physician begins planning later in their career, there are financial strategies that can help make a long, rewarding retirement a reality.     

Q: Though each financial plan will vary from case to case, what is the basic game plan for all physicians to consider?

BD: Every physician has their own goals and objectives, but there are some areas to always keep in mind during planning. Having a trust is essential, as it ensures an orderly transfer of property. This helps physicians to consider everything from taxes to generational and business transfers.  Managing assets over time for the benefit of heirs and other beneficiaries and protecting assets from creditors' claims often are areas that physicians pursue. The ability to create a structured way for administering personal and financial affairs, especially if the physician becomes incapacitated, is critical. The effective use of credit is another important consideration. From leveraging investment portfolios and real estate to mortgage financing, it is important to identify the ways that are the most beneficial to the physician.

Q: What are the biggest challenges physicians face when planning their financial future?

BD: Since physicians work with multiple service providers, the challenge is to find an advisor who understands the ASC industry, has experience in developing a customized strategic plan and has the ability to tactically execute the plan. An area that physicians should keep in mind as they plan is any type of M&A activity for their private practice. In such cases, a pre-transaction plan should be created early, and then utilized to maximize the efficiencies of the deal. That plan should look to maximize the benefit of generational strategies and maximize the after-tax wealth by minimizing the impact of income tax.

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