As physicians, we spend so much of our lives learning how to take care of patients. But when it comes to managing our money? That part’s completely left out of training. And for most of us, by the time we finish med school, residency, and maybe even fellowship, we’re years behind when it comes to building wealth.
So it’s no surprise that one of the most common questions I get from doctors is:
“Should I hire a financial advisor?”
When I first started learning about personal finance, I wasn’t sure either. In fact, I remember reading a bunch of finance blogs where people were adamant that hiring a financial advisor was a bad idea. The main argument was around fees and how they could cost you hundreds of thousands of dollars over time. That scared me off.
But over the years, my perspective has changed to become a bit more balanced. Let me explain why, and share what I believe doctors should know before hiring a financial advisor.
Disclaimer: This article is for informational and educational purposes only and does not constitute financial, legal, or investment advice. Any investment involves risk, and you should consult your financial advisor, attorney, or CPA before making any investment decisions. Past performance is not indicative of future results. The author and associated entities disclaim any liability for loss incurred as a result of the use of this material or its content.
Why Doctors Think About Hiring an Advisor
Most doctors I know are incredibly smart, but when it comes to money, many of us feel behind. We’re busy, often overwhelmed, and the truth is, managing our finances can be the last thing on our minds after a long day at the hospital.
Here’s what I typically hear from physicians considering an advisor:
- “I don’t have time to manage my own investments.”
- “I’m afraid of making a big mistake.”
- “I just want someone to take care of it so I can focus on medicine.”
And honestly, I get it. There’s nothing wrong with asking for help. But like anything in life or medicine, it has to make sense, and you need to understand the fundamentals before handing over control to someone else.
What Financial Advisors Actually Do
I think a lot of people are unclear about what financial advisors actually provide, so here’s a quick rundown.
A good advisor can help with:
- Investment management
- Retirement and tax planning
- Insurance and estate planning
- Overall financial strategy tailored to your goals
But here’s the catch. Not every advisor provides all of these services. Some focus solely on investments. Others might primarily sell insurance. And some work more like coaches, helping you map out your goals and keep you accountable.
So it’s important to know what kind of support you’re actually getting and what you’re paying for.
A Story That Changed My Perspective
Let me share a story that really made me pause.
Years ago, I had a conversation with an anesthesiologist who was close to retirement. This was someone who had practiced during the golden years of medicine, when reimbursement was high and schedules were more forgiving.
But when we started talking about retirement, he looked at me and said, “Honestly, I’m not sure if I can retire yet.”
That caught me off guard. I asked what he had done with his money over the years. He told me he managed his own portfolio, but he had spent most of his time chasing hot stocks and the latest investing trends. He didn’t invest in real estate, didn’t build any cash flow, and never developed a plan for retirement.
He had the income, no doubt, but not the strategy. I walked away from that conversation thinking: “Someone like that might’ve done better with a financial advisor from the start.”
That was the moment I realized this whole “you should never hire an advisor” thing wasn’t always the right answer.
Let’s Talk About Fees
One of the biggest concerns around hiring an advisor is cost. And that’s fair. You should know exactly what you’re paying and what you’re getting in return.
Here are the main ways advisors charge:
1. Percentage of Assets (AUM)
This is the most common. They charge a percentage of the money they manage for you, usually around 1% per year. So if you have a $2 million portfolio, that’s $20,000 per year. Every year. Whether they actively manage it or not.
2. Flat Fee
Some advisors charge a fixed fee, like $5,000 per year, regardless of how much money you have.
3. Hourly
You can also hire advisors who charge by the hour. This is great for one-time reviews or if you just want someone to double-check your plan.
4. Commission-Based
These advisors earn money by selling you financial products like life insurance or annuities. I generally advise caution here. If someone gets paid more for putting you in a specific product, that’s a potential conflict of interest.
In my experience, hiring a financial advisor can absolutely make sense in the right situation. Here are a few examples of when it might be worth it:
- You don’t have the time, energy, or interest to manage your own investments
- You’re facing a major financial transition, like retirement, selling your practice, or receiving an inheritance
- You want strategic guidance around tax planning, estate planning, or insurance decisions
- You’d benefit from a second set of eyes to help avoid costly mistakes
- You tend to be a big risk-taker, and having someone to talk through big financial moves would help you stay grounded
There’s also something to be said for peace of mind. Just knowing you have someone helping you navigate your financial life can be a huge relief especially when you’re already juggling so much in your career and personal life.
I’ve seen plenty of colleagues who are incredibly talented physicians but got into financial trouble because they didn’t have a clear plan. One doctor I know lost six figures chasing a speculative tech investment. He admitted later that he didn’t fully understand the risk. A good advisor could’ve helped him think it through, maybe even saved him from making that mistake altogether.
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When a Financial Advisor Might Not Be Worth It
There are definitely situations where you don’t need to hire one… at least not yet.
- If you’re comfortable managing a simple index fund strategy yourself
- If the advisor earns commissions and you don’t fully understand what they’re recommending
- If you haven’t taken the time to learn the basics of personal finance
In those cases, I usually suggest investing in your own financial education first. Read a few books. Follow blogs and podcasts. Learn just enough to feel confident asking the right questions.
That way, even if you eventually hire someone, you’ll stay in control of your financial life.
How to Choose the Right Advisor
If you decide to explore working with an advisor, here are a few key questions to ask:
- Are you a fiduciary at all times?
This means they’re legally required to act in your best interest. - How do you get paid?
Make sure you understand if it’s fee-only, flat-fee, or commission-based. - Do you have experience working with physicians?
Our financial situations are unique. You want someone who gets that.
I asked our partner, Austin Dean from Waystone Advisors, for his thoughts, and he said,
“Look for an advisor who takes the time to truly understand your goals and needs before offering a plan or strategy, not someone who just tries to fit you into their pre-set box.”
Final Thoughts
Look, a financial advisor isn’t a magic solution. But in the right situation, and with the right person, they can help you avoid major setbacks and build real, lasting wealth.
At the same time, it’s important to never fully check out. This is your life and your money. You don’t have to become a financial expert, but you should know enough to stay dangerous… in a good way.
Because at the end of the day, you’re the CEO of your financial life.
Your Next Step
If this hit home and you’re not sure where to start, begin with an audit of your financial setup. Ask yourself:
- Do I have a long-term plan?
- Do I understand what I’m invested in?
- Am I doing this intentionally—or just winging it?
Ask good questions. Learn first. You’ve worked too hard to leave your future up to chance.
Were these helpful in any way? Make sure to sign up for the newsletter and join the Passive Income Docs Facebook Group for more physician-tailored content.
Peter Kim, MD is the founder of Passive Income MD, the creator of Passive Real Estate Academy, and offers weekly education through his Monday podcast, the Passive Income MD Podcast. Join our community at the Passive Income Doc Facebook Group.
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