5 things veterinarians must ask their financial planner


"How much do you cost?" is a good question. "How do you make your money?" is a better one.

If you feel a little out of your depth after jumping into your quagmire of veterinary school student debt, practice purchase debt, retirement woes or fears of paying for college for the kids, you're not alone among DVMs. But if it's a financial planner you need, how do you go about finding one that's right for you?

Mark McGaunn, CPA, CFP, who works with veterinarians and veterinary practices at McGaunn and Schwadron CPAs in Boston, says your first two questions should not be: “Can you help me?” (The answer will almost always be "yes.") and “How much do you charge?” (Come on, you don't like when pet owners judge you that way.) Instead, McGaunn thinks you can start a good conversation with a planner with some more pointed questions. Think of it as a job interview with someone you might be working with for 25 years (it's a long way to retirement). Here are McGaunn's five most important questions to ask a financial planner before asking them to assist you with your finances: 

Do you treat our relationship as one that is fiduciary in nature?

In general, investment brokers and insurance agents have a primary duty to their agency or company, not to the client, McGaunn says. Things to ask:

> Are my interests placed first, even if it may cost you or your firm to do so?

> If I don't need to do or change anything, will you tell me just that?

> If you're not the right person to help me, will you refer me to someone more qualified who is?

How are you compensated?

There are three ways a planner can be paid: on commissions, fee-based (commissions and fees, depending on the work) or fee-only.

“If a financial planner says you aren't paying for their work, you should run,” McGaunn says. “The financial services industry is a closed system, so when purchasing a product like an investment, an annuity or life insurance policy, there is some form of compensation flowing from the clients' purchase, unless you're paying for advice only [through just fees].”

What credentials and certifications do you possess?

The most common financial planning certification in the United States is the Certified Financial Planner (CFP). A CFP has passed a certification exam, has at least 3 years of financial planning experience and completes CE courses to maintain certification. Other individuals may not have the designation and be equally competent, McGaunn says. However, it's one test to see whether the planner has gone above and beyond.

What services does your firm provide?

Some advisors handle most or all financial services you might need in their private practice or larger firm. Other planners specialize in retirement or investment management. In a complex situation, which may be the case with a veterinary practice owner possessing a large retirement plan, a valuable hospital and practice real estate, operating with a group of individual service providers with no coordination could lead to a disjointed plan.

Do you have clients like me that you advise?

Some firms specialize with clients of a single profession; others work with the very wealthy or young, wage-earning couples. Choosing someone who has experience with clients in your situation will keep you from needing to explain your industry and, for instance, how practice valuations work.

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