Many advisors focus their client acquisition on efforts specific professional demographics, including business owners, lawyers and many more. Of course, that segmentation includes doctors.
Forgive me for taking this liberty, but I’m going to lump dentists in with doctors for the purposes of this piece. Advisors’ attraction to these prospects is understandable. In 2024, the average salary for “all U.S. physicians, including Primary Care Physicians and Specialists,” according to Kaplan. At the high end, orthopedists and their surgical counterparts made an average of $564,000 in 2024.
Dentists make “good” money in their own right with their 2024 median pay being $179,000, according to the Bureau of Labor Statistics (BLS). Some surveys indicate the average pay for a general dentist is around $210,000 while specialists can earn close to $250,000 per year.
Advisors get the point. Doctors and dentists, broadly speaking, reside in income ranges and tax brackets that are attractive to wealth managers. However, the pay scales of medical professionals don’t imply everything is perfect and the aforementioned salary specs certainly shouldn’t be interpreted as physicians don’t need to work with advisors when they most certainly do.
Doctors Face Elevated Financial Stress
It sounds trite, but it rings true with physicians: making a lot of money is nice, but it’s far more pleasant when large debt isn’t part of the equation. It’s one reason why Uncle Sam’s student loan programs for select professional programs, including medicine, will be capped at $200,000 starting in July. That might not be enough.
A new survey by Panacea Financial, a provider of fintech services to doctors and practices, indicates just 47% of those surveyed said they’d still choose medicine if the $200,000 cap was in place when they were going to medical school. The remainder either said “no” or they weren’t sure. Translation: the juice (the big paydays down the road) isn’t worth the squeeze (sizable student loan debt). It’s also worth noting the survey includes dentists and veterinarians.
“The survey data paints a detailed picture of how completely student loan burden shapes doctors' financial lives,” notes Panacea. “Paying off debt was the single most common financial priority named by respondents, cited by 79% as their top goal. This ranked above retirement savings, homebuying and investing. Among those actively paying down debt, 88% identified student loans as the primary burden.”
Alone, the above confirms the notion that advisors and medical professional need to find ways to come together. Bolstering the case is the fact that career advancement/higher salaries don’t always alleviate financial stress.
“Of doctors who said they struggle to balance loan repayment with other financial goals, 37% were already in practice, a sign that higher attending salaries do not automatically resolve debt-driven financial stress,” adds Panacea.
A Crisis of Confidence
Though the Panacea survey doesn’t overtly say dentists, doctors and vets should be working with advisors, there are signs those relationships need to form, including a clear lack of confidence among these medical professionals.
“Financial confidence across the doctor population remains low. On a five-point scale, 71% of respondents rated themselves a 3 or below. Even doctors in practice averaged just 3.27 out of 5. Medical students averaged 2.33, and residents and fellows averaged 2.63,” according to the study.
Numerous other studies confirm that advised clients are significantly more confident than their unadvised counterparts and that may well be something medical professionals need to consider.
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