You should know early and often that the financial industry is not your friend. The financial industry is notorious for duping doctors. In fact, Bill Bernstein, MD (a retired neurologist turned financial advisor puts it this way):
Act as if every broker, insurance salesman, mutual fund salesperson, and financial advisor you encounter is a hardened criminal, and stick to low-cost index funds, and you’ll do just fine. ~William Bernstein, MD. If You Can
The truth is that the whole financial industry is designed around selling products. This episode is all about knowing how financial advisors, insurance companies, and agents often dupe doctors… that way, you can avoid the common pitfalls that many doctors experience.
What You’ll Learn from Ways That The Financial Industry Dupes Doctors?
Okay. So, you’ve come to realize that the financial industry is not your friend. Maybe you already knew that? Here is what you can anticipate learning in today’s episode outside of that common knowledge:
- How much insurance agents make selling disability insurance policies.
- Why your financial advisor MUST be a student loan expert, if you are a physician.
- How Northwestern Mutual dealt with the newly required fiduciary standard. Hint: their disclosure is worth the read.
- The difference between an insurance agent masquerading as a financial advisor, and real advice.
- How much money the financial services industry spent on educating consumers versus marketing their products.
- The difference between fee-based and fee-only advisors, and why it makes all the difference.
Resources from the Financial Duping Episode:
Check out the resources mentioned in this episode:
- Why You Shouldn’t Trust The Financial Industry
- The Insurance Agents You Should Get Your Insurance From
- The running scorecard between passive index funds and actively managed funds
- Examples of the financial industry fighting the fiduciary requirement
- Information on Northwestern’s Own Statement disclosing their giant conflicts of interest
- Your Money and Your Brain
- My disability insurance debacle
- Loan Buddy Software for Student Loan Analysis
This Episode’s Sponsor
This episode’s sponsor is Jamie Fleischner from Set for Life Insruance, which is one of the nation’s top independent brokerages specializing in life and disability insurance for physicians and professionals. Since 1993 they have worked with thousands of clients finding the most suitable products at the greatest discounted price.
Jamie has been a long time sponsor at The Physician Philosopher, and I’ve never heard a single bad review from my readers. So, if you need a term-life insurance or disability policy, you can reach out to Jamie by calling Set for Life at 888-553-3559 or emailing her team at [email protected]
Listener Question of the Week:
Today’s question comes from Dr. Douglas who asks,
“What would be your approach to wanting to work with a FA formally but not wanting to pay 1% AUM. When does the 1% really start adding up (a dollar figure)”
Each episode, we are going to start including listener questions as they are provided to us. So, if you have a specific question you’d like answered on the podcast reach out to us! Email [email protected] or [email protected]
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Following the Financial Crowd
Have you ever left a sporting event, following the crowd, and suddenly realized you were walking the wrong way? What if I told you this phenomenon has a name, and it impacts your money, too?
Understanding our own behavior when it comes to finance is essential because it helps us mitigate wrong-for-us decision making around money. Unless you know these roadblocks exist, you can’t do much to stop them from derailing your financial goals.
Last week, we shared why human behavior matters for our financial lives by taking a look at the first 5 out of 10 psychological phenomena that can (and do) affect your personal finance goals: greed, fear, ego/overconfidence, loss aversion, and analysis paralysis.
This week, we’re diving back into behavioral finance (one of our favorite topics) to share five more types of unchecked human behavior that can sabotage your journey to building the wealth you want.
Greed, FOMO, and Bad Investments
Despite our best intentions, certain emotions can keep us from building wealth. After many years arming physicians with the information they need to achieve financial wellness, I had a significant realization.
Information is one thing – behavior is another.
As the saying goes, money is 80% behavior and only 20% math.
Not only do I want to share important information about personal finance, I also want to help you recognize how certain behaviors can (and do) affect your finances.
Drawing from one of the classic books about investing, let’s go over five common behaviors that could be keeping you from achieving your financial goals.
How Doctors Can Get Good Financial Advice
Many doctors and high-income professionals hire financial advisors for any number of reasons. Either they’re too busy to handle their finances themselves, they don’t really know how to invest, or they want an expert on their side to make sure they’re on the right track.
So allow me to say from the start: I’m not against financial advisors, but I am against doctors (or anyone, really) being overcharged for bad advice.
There’s no shame in asking for help – you just want to get the help you need at a fair price.
You should be equipped enough to vet and evaluate your financial advisor so you’ll know whether they’re working well on your behalf. How can you be as confident as possible they’re acting in your best interest? This episode will help you find out.
Are you ready to live a life you love?
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Awesome podcast guys! As a NWM victim myself, I am always fascinated how Northwestern Mutual screws people, and docs in particular.