Have you heard the audio version of my interview with Ryan? No? Let's get you over there:
Ryan Inman is a fee-only financial planner with Physician Wealth Services. He is also the host of Financial Residency, a podcast devoted to giving new attending physicians the tools they need to grow and protect their assets.
He was a major inspiration in my goal to start a podcast and educate teachers regarding their finances.
When I sat down to interview him, I wanted to hear his background story, and why he started his podcast.
How Ryan Got To This Point in His Career:
I'm married to a physician, my wife is a pediatric pulmonologist. We've been together since we were 18 (freshman year of college).
We’ve been together for 17 years now, through all her years of training. Physicians go through four years of college, four years of med school, three years of residency training, and then she opted for three more years of training called a fellowship.
During this time, I'd worked with other advisors, we get our degrees and then work for bigger firms. They're mostly about pushing products.
She was being pitched some terrible products. They made them sound like, this is what you have to choose, otherwise, you'll lose it.
I just said this is not an industry that I want to partake in. That’s when I decided to start my own firm and to work with physicians. Truly just physicians, because I knew that I could help them navigate the crazy world of finance, similar to how you work with teachers, right?
There's a lot that goes into each profession, and to pretend that I know what teachers are truly going through, it would be a joke, right?
It's about living it and breathing it. You know the highlights and the pain points that each profession is going through. The reason I created Physician Wealth Services is to be a specialist for physicians.
There are teachers out there wondering why I’m interviewing a financial advisor to physicians.
Let me answer that unspoken question: Ryan and I have something in common. We both started in the financial services industry learning about the “big firm” way of doing things. We learned how to push the product.
Things are changing, but any help that you are offered tends to come with minimum account sizes and products.
Educators fall into that category where it's all products.
It’s rare that there is a comprehensive plan that's accessible to educators. Ryan has observed this, too. It’s that way on the medical side, and we see it on the education side.
That means we have a lot of crossovers, and we both care about the totality of our reader's lives!
What was it like starting out?
During residency and training, physician salaries are about $50,000 per year. My wife did six years of training.
Our average client comes out of training with approximately $290,000 dollars of student debt.
There is a lot of student debt, and not a very strong salary to start off. You have no assets, and the only way that you're going to ever work with a planner will be in the traditional model, which is to be sold a bunch of products.
That's the exact opposite, that all of you need.
This is when you need to take a deep look into your financial picture. Just because I work with physicians, we're all humans and have human emotions, we all experience being overwhelmed by our student loan debt and how to build assets.
We both talk about life planning, we talk about the other things that go into building a financial plan, so that is very similar.
It's just the nuances and the challenges that are very specific to each profession. But underlying, we're all humans.
Some people might think that physicians make a lot more money than $50,000 starting out. However, most people know that educators don't make a lot starting out.
Something that's similar between the professions, is the accessibility to financial advice is something that has to be quick, easy and convenient. It’s a time when you're very busy.
For most people, the accessibility of planning is not there. The representatives who approach educators have a product that seems to help with a “need”.
The problem is they are not considering a strategy that coincides with the client’s overall life plan.
I never thought that teachers had massive student loan debt. Maybe some educators, but not to the tune of $200,000.
However, I've seen people become teachers, who were going to school to become a chiropractor.
The reason they decided to go into education was to use student loan forgiveness in order to get rid of their student loans!
Going into the Pitch
That's an underlying problem of student debt. The government stepping in and giving loans and the tuition just rising rapidly.
It's unfortunate that we have two trillion in student loan debt at this point.
The reason that new teachers who are just starting out are buying these products is no one's doing financial planning with them.
There are very few of us, who do the type of financial planning that isn’t centered around product sales. It's just not as profitable, but I don’t believe in selling products.
The majority of people who work with teachers know that in order to be truly profitable in a scalable business, they either have to charge a whole bunch of money, that teachers really can’t afford, or they're gonna have to sell them products.
The few teachers I know, they don't take the time to look at the whole picture.
They just choose an option with the intent to figure it out later. They’ll say, “I'll choose the best option .''
Instead, go through one time, and pick the right thing:
Do the due diligence
Choose the right person to partner with
If you need help, choose the right type of financial planner in the beginning. As opposed to just the first option or the cheapest option.
You are right.
There are very few planners that are fee-only financial planners that specialize in working with teachers in the US.
Most people do have to sell a product in order to make it profitable.
There's another way to go about it. It’s called scaling and working with more people. There's only a few of us doing this, and we're trying to make it work for educators.
We want everyone to know that there is hope and that there is the accessibility to planning from the beginning. That is an hourly type of work or ongoing planning.
We want to make sure that you're saving money from day one. I don’t just mean saving money in an account but saving money on fees.
We want your money to stay with you, and not in somebody else's pocket.
You know it’s pitch time when you hear:
Hey, I got this really great product...
You know, Jane, we were reviewing your insurance, and we really feel like there's a gap in your coverage.
Then the pitch would continue…
”We know what would make this gap go away”. Then the representative would put some pressure on you to convert the insurance into permanent insurance, “You know if something happened to you, your family would be out on the streets”.
The representative is really saying they want to make a big commission by selling you a product. A permanent insurance product.
They pay so much money, but there’s a conflict of interest.
In the physician space, and I believe this happens in the teacher space with products, they know that you can't really afford comprehensive financial planning, that is reserved for people that have multiple millions of dollars with them.
A representative may indicate the financial planning is for free. However, they’ll suggest that you need to buy certain products.
The conflict of interest is insane.
You're basically having to buy these products from them, and you're hoping and trusting that they're telling you the right thing.
Keep in mind:
Is this advisor telling me this because it's beneficial and the right thing? suitable for me?
Are they giving you a pitch to make a commission?
They're going to earn the majority of the fees that you pay them through those products.
Pension Review & 403b
The representatives will tell you that they want to do a pension review.
You’ll be tempted because a lot of people want to know about their pensions. However, be careful, you’ll go in for a pension review and the next thing you know, you’re walking out with one of the most expensive 403b accounts off of a list of 20 (there are some very that are very inexpensive), plus an insurance product of some sort.
Before you go for any reviews:
Did anyone ask you if you're utilizing your FSA?
Did anyone ask you if you have an emergency fund?
Did they ask about your student loan debt and how you're paying that off?
Did they ask you these questions?
Because no monies were made looking at your whole picture. They make money via the product. Plus, they probably can't even talk to you about that stuff. It's not within the scope of what they do.
It's unfortunate because money might be going into the wrong places, and into the wrong categories.
A fee-only financial planner will make sure that you are building a solid financial foundation, then you’ll have better options later.
In fact, you might want to read my blog about the open Probe on 403b sales, and how they affect teacher finances.
It comes back to that foundational planning. They're not planners, they are insurance salesmen or women who are pushing products.
There was a study that indicated more than 97% of all advisors are fee-based advisors.
That means any advisor that you might choose on the internet, or you're introduced to through a colleague who attempts to sell you products.
The other three people are going to be fee-only.
That means the fee is paid by the clients.
Breanna and I, work with a certain professional group, finding someone who commits to a specialty is very hard.
If you run into someone that is a financial planner, financial advisor, or whatever they want to call themselves, they're probably in the business of pushing products.
I always say: Insurance is insurance; investments are investments, and never mix the two. You’ll be good if you can remember that one rule.
Let’s do a little quick clarification.
Fee-based is somebody that can charge fees and commissions. They're not true third party individuals, and they can still receive a commission. But unfortunately, for some reason that that terminology is really sticking within the community being confused with fee-only.
Can you tell us what the fee-only financial planner is?
There's an easy way to distinguish: If someone sells insurance, they are fee-based. If you want to know if they are fee-based ask them:
Do you sell insurance?
If they say yes, then they're fee-based. If they don't, then they likely are going to be on the fee-only side.
If you talk to a fee-only financial planner: The actual cost will be stated in the client agreement.
If Breanna is going to be my client, I’ll present her with a client agreement. She will read through it. We may decide, let's say $2,000 a year.
Whatever we decide that is the fee for our relationship to exist. I’m an independent third-party fiduciary for her, that is all I can get paid.
What a Fee-only financial planner does is very black and white.
A true financial fiduciary will under no circumstances put their own interests or anyone at the firm's interests ahead of their clients.
You will find that no one in the fee-based world is willing to do that.
OK, quick check in!
How did you like this blog? If you've found it helpful and enlightening, please share your thoughts in the One Million Apples Facebook Community!
Or... if you find yourself in need of someone who can help you navigate your way through your financial plan, check me out at Wealth of Confidence!
I'd love to help you.