In episode 3 of the Medical Spa MD Podcast we discuss social media marketing, consultations, and interview Dr. Setu Mazumdar about wealth management for physicians.
Introducing our latest podcast creation, episode 3, in which we start of by discussing using Twitter and social networks for business marketing. Does Twitter work? Where's the value? Who should be using it? We're also discussing how to increase the level of trust that both your staff and patient populations have and how that relates directly to sales and patient involvement.
The interview in this episode is with Dr. Setu Mazumdar of Lotus Wealth Managment. Dr. Mazumdar is an MD who's now changed careers to become a financial and wealth management advisor specifically for physicians who are looking to get their house in order. We discuss how physician training does not equip docs with the knowledge and skills that they need to actually accumulate wealth, and how you can make some changes that give you control over your finances. Dr. Mazumdar details common mistakes that docs make and how they can be avoided or resolved.
Some of what we talked about in this episode.
This Medical Spa MD Episode Transcript
This is Medical Spa MD.
Andy: Hello everyone and welcome to the show. Well, we help cosmetic physicians. We claim control of their medical practices and lifestyle, even if you're clueless about running a business and you're already working a sixty-hour week,
Medical Spa MD, of course brought to you by MedicalSpaMd.com, a worldwide community of physicians practicing cosmetic medicine. Hello Jeff!
Jeff: Hello Andy, how are you doing?
Andy: I'm very, very well. Thank you!
In this episode, a bit later, and it's with Dr. Setu Mazumdar. I forgot his name right there. But first, what's new? What's been happening? Medical Fusion Conference still going forward?
Jeff: Medical Fusion Conference is still ramping up, so you know, we want to encourage everybody who can to take a look at the site or go on to MeducalFusionConference.com or take us up a special offer in Medical Spa MD and visit us there. We made the Medical Fusion a select partner so if you go to the site and you click on ‘Select Partners’ you'll get a page and it will have all of the special offers there and you probably would want to take us up on that. Since, they're pretty spectacular, actually.
Andy: Fantastic. I've got a question for you Jeff.
Jeff: What's the question, Andy?
Andy: The question is: Do you use Twitter?
Jeff: You know, I did use Twitter quite a bit. I mean there was a little bit of a fad there, probably about six months ago or something where, you know, we had multiple Twitter accounts and we were using it to promote things and stuffs quite a bit.
Now, I have to admit that my usage of Twitter has kind of dropped off. It is something that we still do use, but there are a few challenges that we've kind of come to realize with that and certainly with limited resources in any of the businesses or endeavors that I'm involved with. You always have some kind of limited resources, so we still kind of keep it up. We still do use it. If you measure across our Twitter accounts, certainly thousands of followers. But, the activity stream on Twitter is not probably as large or as heavy as it was probably six months ago. What's your experience with that, Andy?
Andy: Me, as me, what I do, a podcast producer and stuff like that. I started using it as an experiment about a year and a biz ago. I was quite a late adopter, as I would say, on Twitter. I just used it as an experiment and to be honest with you, of late I have tweet faded [slight? – inaudible – 00:02:49] me.
Jeff: Is that the term tweet faded?
Andy: I just made it up. I'm just hoping I'll create a new word that would just like carry on and have a life of its own.
Now, it turns to be less frequent tweets. It's strange because I always come across people that say: "I've got a website and what should I be doing?". And I'm always finding myself saying to them: "Well, if you want some more clients get on Twitter and first thing you want to do is get yourself an account then search for your keywords. You know, your world. And just say, who's talking about what you do and start following them and about half of those, will follow you back. And then start putting useful bits of information on to help you."
Jeff: And you know I think that's where a lot of people kind of drop the ball and probably myself was as guilty of this as anyone is trying to provide only real actual value on the Twitter stream. It's so easy to do and I think that it tends to be a domain of useless information and spam to a large extent.
And for an individual that's really connected with their best friend is totally fine and appropriate to be. You know: "The sun is shining here...", and "It's just started raining...", and those types of things.
But for a business that's looking to potentially use Twitter as marketing, it's challenging to kind of breakthrough that draws and really connect with people in kind of meaningful way that will actually both provide value, help your reputation, help your trust in the market place and drive revenue.
Andy: Yeah, I've recently been combining useful information with useless information coz I have what goes… Let’s say for example…
Jeff: Did you start out with only useful information?
Andy: No, I start out with useless information like the [inaudible - 04:44] classic ‘I’m having sausages for breakfast’ something like that. And then I started to give out more useful information like ‘Ooh, have you seen this website?’
And now is more of a combination of ‘while I’m sitting in the Red Rose Coffee Shop writing the book on podcasting and things like that. It has been very experimental, my twittering, but I think it’s a very good way of connecting. I have connected with some people some useful contacts through Twitter.
Jeff: Yes. And I think the challenge is actually coming to grips. I’ve just recently read that 25% of all tweets actually have a link in them, which I thought was about right actually, based upon my experience on what I see. It’s often the case that somebody will just tweet links. But, when you have a stream and this is often the case the businesses exclusively, and it’s easy to do, hook up your twitter feed to your blog or something else. And when publish content that creates a link that says: “Our newest blog post is here” and puts in a tiny URL.
The challenge is though that’s in effect because it happens automatically nobody has to do anything and that’s the only thing that goes out. And that’s not really providing value or connecting to almost anybody and I think that this is again one of the challenges of commanding this new kind of social media marketing efforts. And physicians that are able to adapt to these and actually use them to their maximum, well of course, gain a significant advantage in these kinds of market places as oppose to the Yellow Page ads and the calling, coming to the office before they will actually even speak to you.
Andy: I think it’s all [inaudible – 00:06:41] that the personal thing as well as to showing that you’re a real human being this is why you’re eluded to it just earlier. I don’t like the idea of automated tweets going. I know you can get plug-ins to your WordPress blogs so that when you put a new post out there it just automatically tweets out. I always like the more personal [inaudible – 00:07:00]. How do you feel about that Jeff?
Jeff: Well I think that’s exactly right. Everybody likes that. Now, I have plug-ins. I use these because it is one more way getting both the word out, driving traffic to your site, and there are some probably [inaudible – 00:07:16] benefits from that. That being said, if that’s the only thing you’re putting out, you’re in effect shooting yourself in the foot right there because you’re not providing enough value that anybody actually wants to listen to what it is that you are saying. That’s really the benchmark of how you’re going to build a community around your medical practice and raving fans or zealots as oppose to someone who came in and got treated and feels [sixes? - inaudible – 00:07:46] about you.
It’s the other stuff that you do. It’s not the treatment. It’s not the specific outcome. it’s all of the other things that you do that kind of go into developing sense of trust inside of your market place and can really turn patients who have kind of got in and had a treatment to those patients that you’ll personally offended if somebody else has a treatment from a different clinic or physician. I mean, we’ve all had those and every practice has those patients that are real zealots and they bring in their friends and they go out and then they walk the streets and talk to people looking to help your practice.
Every clinic or every business has some of those, but if you’re smart about what you’re doing and do it correctly, you can have, instead of having a dozen of those or five of those, you can have 20% of your practice being like that. The trick of that is, it’s not a trick, it is actually providing real value as oppose to kind of just lip service to a number of these kinds of things. Yes we have a Twitter feed, yes we have a Facebook page, yes we send out a newsletter and some other things, but how much value do people actually derive from that. I’m a big proponent that the more value you provide and send into your existing community, the stronger that community becomes and the more business results, in effect, you’re going to be able to draw out of that community over a period of time.
It’s a little like compounding interest and I’m a big proponent of compounding interest. It’s the little things that you do. It’s like a new website, Andy. You’re familiar with this. Every time you add content to the site that is valuable, it’s kind of little another grain of rice out there. If you only got six grains of rice, it’s not really full meal, but if you have hundreds or thousands or tens of thousands of blog posts and comments and their relevant where somebody can go and find information what they’re looking for. And you put yourself in the position of one of trust because you’re only looking out for somebody’s best interest, no matter what that person might be. That kind of comes across. That can really help to the success of your practice and actually make you money. It’s not only good since to put that into the community, it’s actually very, very good business sense.
Andy: I came with a phrase in my book a few weeks ago actually. It was passive publicity. And the reason I came up with that phrase is because when you build a raving fan-based through social media, whether it be Twitter, whether it be Facebook, whether it be LinkedIn, whether it be Podcast over the [inaudible – 00:10:44], you do have this kind of ongoing chit-chat, hopefully positive, about you and about what you stand for, and about your brand that goes on whether you’re there or not. I think more so than before we had social media if that make sense.
Jeff: Yeah, oh yeah. Absolutely! It doesn’t necessarily have to be you as a physician who is doing this. Some physicians really are actually quite good at this and do this quite a bit. You’ll bounce across these physicians and you’re like: “Are you the one doing this??” because they’re putting a lot of content both on Twitter and they’ve got a video feed on YouTube. And some of them are doing these all by themselves and they really enjoy this.
For a lot of physicians that’s not really practical to spend three or four hours a week even as little as that might be, you know you’re saying ‘Can’t you fit three hours?’. Well possibly… But if you are working sixty-hour weeks or eighty-hour weeks or you don’t enjoy it, there’s no reason you actually have to do that. But as a business, you need either have your Frontdesk doing it or somebody needs to be providing value. The training for that is not extensive by any means, but somebody’s who’s doing it needs to have a little bit of a personality.
There are… I won’t call it tricks, but I’ll say well-known methodologies for treating people online and developing relationships. Having a personality and being slightly funny is something that works actually quite well. Being human… We’ll talk in future Podcasts about training around consultation rooms, Frontdesk operations and interactions with patients and best practices for physician consultation. Your marketing and sales materials really should be setting you up, and you have probably hear this phrase a few times during this podcast, is really designed to put the physician or the practice on the pedestal. And what I have always taught my physicians is that my job is to put you on a pedestal so that the patients sitting in the consultation room, when you walked into the room they already have a tremendous amount of trust in what it is you are going to say. We’ve done a good job and we’ve put you in the very best possible light. When you walked into the consultation room, you’re on a pedestal. And your job is to step off that pedestal and talk to that patient 1 to 1 as a real person.
Now, some physicians are really, really good at this. One of the best that I ever saw was a physician that we hired and she was with the Park City Clinic. Her name was [Eda Burgstrom? – inaudible – 00:13:45] and she’s practicing in Washington DC. She’s just fantastic about walking into a consultation room and making the patient feel as though she is a trusted adviser. And there’s an entirely different kind of mentality because she is actually looking out for that patient’s best interests. That was one of what I always told every member of all of our staffs and physicians is that: ‘I don’t care if we lose this treatment. If they do not need this, do not sell this to them.’
Andy: Yeah, you got the patients’ best interest at heart.
Jeff: And the reason is slightly philanthropic that I just do not want to put anybody in a position where they are selling something that the patient doesn’t need because it kind of comes across. And it damages not only your reputation when it gets out, and it always gets out, but also your camaraderie and the way your clinic operates. If you are forcing your Frontdesk staff, your nurses and your laser techs and aestheticians to, in effect, sell things that people really don’t need, it is just corrosive.
The other thing is, it’s kind of one time sale. So, when we would have a patient and they would come in and would think that they wanted Botox but they didn’t have any wrinkles, physicians would go on to say: “You know, you really don’t need Botox.” First of all, sometimes they’ll try and get that easily. There’s nothing that’s going to be of benefit get of benefit. You’re going to waste $300 or $400 and you’re going to drive no benefit from this. You do not need this. Come back in six years when you’re starting to develop crows’ feet and we’ll talk. What happens is when you do something like that is that your trust, in effect, goes through the roof. It doesn’t matter that they did not get their treatment from my clinic at that time because in the next three months we’re going to see them again.
We saw tens of thousands of patients in our clinics and that is almost invariably the case when you have that level of trust. Cosmetic medicine is a desire and the fact that you didn’t give somebody a treatment did not kill the quench of desire to do something, and often is the case.
I’ll tell you one story. Our very first clinic came out originally a plain management clinic and so you have a lot of people in there. It’s amazed me what would happen. We had a patient come in and this is a patient who is tipping ninety years old. She was in a wheel chair. She probably had six months to live and she wanted a laser hair removal for the hair on her upper lip. Of all the possible things that she might need, this was very important to her. I can speculate on the reasons and we probably can figure out exactly why she might want this or not. it is the case that cosmetic medicine has a very large powerful draw for most people.
I would tell our physicians: “Look, we are on the vanity business. That’s really what we are. We’re not here saving lives. There are times that we are going to do a tremendous amount of good.” I remember one patient came in and she had a birthmark and this is actually an interesting story. She had a birthmark that covered probably about a quarter of her face. On the right side of her face she had this deep purple mark birthmark that went up and covered her ear completely and went up to cover the side of her face. It’s super noticeable. It was basically as though her face, quarter of it, was bright purple. She came in and we went through a number of treatments. I think she had, I think, six or eight treatments in order to treat this. And in effect unless you actually knew that it was there, we got rid of this. That literally changed her life in some very odd ways. One of the things that she became extremely conscious is that people would actually look at her when they talked to her. There were tears. We literally changed her life.
She was a 35 year old mother and had always had this since she was born and had always grown up with people looking at the right side of her face when they talk to her. It’s almost impossible not to because it’s so distracting them. But when we got rid of that, it literally changed her life.
Or if you’re a 16 year old high school girl and you come in and we treat you for acne and we’re able to help you manage that so that the high school abuse stop, that literally could change somebody’s life. Especially in those formative years, high school kids with acne or severe acne that you can help is both challenging. Acne is a challenging treatment modality for sure, but it’s also extremely rewarding when you actually do that because it’s different than Botox or treating somebody’s crows’ feet. That’s just personal to them. It’s not really going to change their life dramatically. Occasionally, those things will happen that will make you feel pretty good, the “feel good” moments.
Andy: Right. Shall we move to this interview with Setu Mazumdar?
Jeff: Let’s do that. Let’s see what Dr. Mazumdar has to say.
Andy: Let’s have a little bit of background on Setu. He was a valedictorian of [Wood Wood Academy? – inaudible – 00:20:00] and then he attended John Hopkins University. He earned his Doctor of Medicine in John Hopkins School of Medicine. Then he went up to also doing a lot of financial stuffs and investments, interesting guy. Let’s listen to the interview.
Jeff: So Setu, you are both a wealth manager-certified financial planner, and an E.R. doctor. How did that come about?
Dr. Mazumdar: I think it goes back to when I got a residency. I finished my emergency medicine training in 2001 so this is the beginning of my 10th year of practice in emergency medicine and the whole transition came about a couple different avenues. When I got out of the training, I was probably making $30,000-$35,000 a year in my last year residency at the time. And all of the sudden in one month in July, when I started getting a real job, my income went up probably ten times. Like many physicians I thought, making all this money surely if I went through all this training through medical school, residency and everything. I can certainly handle my own investment and [inaudible – 00:21:21] and all that kind of stuffs.
The reality was, after a couple of years I realized that, one, I really had no clue what I was doing because basically we didn’t have any sort of training. I can’t even recall a single hour in medical school or in residency, not even a single hour, in business aspects of medicine and certainly not on financial planning.
Jeff: You would think that medical schools would understand this problem. Why isn’t that the case?
Dr. Mazumdar: I’m not exactly sure why that is, but my opinion on the matter is that when you go through medical school training even residency training, the vast majority of these training centers are academic center. So while you get medical training there’s a very few people who actually run a physician’s practice for one thing and secondly, they’re basically training themselves in a situation where they didn’t get that training to begin with. So, it’s hard to impart something that they themselves didn’t have any knowledge of to begin with.
What I kind of find fascinating is probably one of the biggest things that concerns physicians when they get out of training are business practice management issues and their personal finances, but to me it’s pretty amazing that none of it is covered at all in medical school curriculum and certainly not in residence training. My opinion on the matter is probably that since these are most academic institutions the faculties of the academic institution don’t really have the grasp of the issues to begin with so it’s not integrated in the part of the curriculum while in fact, it’s really a big part of our personal lives. To me, it’s not just that you have medical training. Once you get out, you really have to integrate your training with the rest of your life. And by not focusing with the rest of your life I think is a huge gap on medical training right now. I think it’s going to continue to be and I don’t see how that could be changed based upon the curriculum I’ve seen in various medical schools and residencies.
Jeff: Well it seems that every physician should understand these. These are often one of the first kind of questions we end up talking about has to do with business or finance or money in some way. Do you think all of the physicians, including the ones that are academics, would understand that there is a kind of a gap there and kind of move towards filling it even it was just by providing some opportunity for residents and physicians that are in training to get this kind of education or help?
Dr. Mazumdar: I agree. I think there should be at least some sort of a basic financial planning and business management courses or lectures or some sort of hands-on, sort of training in residency, but it just doesn’t happen. Certainly, it didn’t happen to me. Even speaking to the graduates coming out of training who’ve contacted me, read my article and those things asking them, they even say that it’s just not the case that they didn’t have the single amount of exposure in any of this stuff.
And it goes way beyond that. For example emergency medicine which is my specialty. One of the big things in emergency medicine is that very few emergency medicine physicians are actually owners of their practice. They’re generally independent contractors and so they have no ownership or whatsoever. When people go out, they’re basically sort of “hired guns”. There is a very few democratic groups and the whole issue of how you form a democratic group, what’s the advantages of having your own practice and ownership of it is not even discussed except maybe in for a couple of places.
I went to a residency program that actually did discussed that particular issue since my residency directors are actually one of the founders of American Academy of Emergency Medicine, which really focused on democratic physician groups. But beyond that, it’s really not something that’s discussed really much in the medical circle [inaudible – 00:25:43] not the training. It’s all about all the academic stuff and not all of the other stuff that factors into your life after you’re done.
Jeff: So you graduated, you started making some money and then playing around the stock market and stuffs and you realized that you didn’t have the information and knowledge you thought needed.
Dr. Mazumdar: Yeah, there are a couple of issues. One, like a lot of physicians that get out and they say; “You know if I went through medical school training and I went through residency training, this grooming training, then picking the wing stocks and picking the right mutual fund and all these stuffs are easy.” And then what I realized that, after a couple of years, was, one, I had really no clue what my returns were. And secondly, I started reading all the academic studies and academic research and portfolio management & financial planning. That’s when it me that everything I was doing was wrong.
There is a second motivation here as well, which is that not only that I was doing it wrong and I had no clue, but my colleagues that are all physicians didn’t have a clue either. For two reasons: One (1) was they’re managing it themselves. They’re making the exact same mistakes that I had made. The other issue (2), which probably fueled my passion to go into this, was that a lot of physicians who had financial advisers had advisers who basically were not acting in the physicians’ best interest. And to me that was shocking because, as a physician, morally, ethically and legally, we’re always required to act in the best interest of our patients whether it’s in the E.R., in the office, wherever you work. That’s our legal and moral duty.
The problem with most financial advisers is that it’s not the case and it’s perfectly legal to do it that way. The thing with these physicians who might need advisers, who basically try to sell them products and get a commission off of it, which to me doesn’t resonate with an objected advice. And I was seeing a lot of physicians who have been ripped off, burned by the so=called financial advisers who in fact were only trying to sell them stuffs. I took a look at this and said: “I’ve got this incredible passion for this. My assets have grown because I did a god a job of saving. And I’m seeing these physicians calling to mind who basically weren’t getting objective advice. Wouldn’t it be a great idea for me to use this passion of mine to be an advocate for physicians but on the personal financial planning side?” And that’s how the whole thing blossomed to what it is now.
Jeff: Was this something that you had a seed around starting some other business other that clinical practice in the past? Or was this really something that your plan was to go in the clinical practice and then you saw a need and you [then/didn’t? – inaudible – 00:28:48] decide that at some point you could address it?
Dr. Mazumdar: Actually, when I got out of the residency training I really had no idea I was going to do this. My goal was I was going to work really hard and do as many shifts as I can and make as much money as I can, but you bring up a good point is why would you change from one thing to the next. I think the other thing that happened to me was that as the years went by, I got married and I had kids, I suddenly started to question ‘Oh yeah, making all these money’, but I was almost miserable about it because I really wasn’t enjoying it. I had night shifts, weekends and the things I was missing so I took a big step back and said: “OK, hold on. What really makes me happy? Is it doing all these nights and making this money? Or is it spending more time with my family?” Of course I chose the second.
Basically where I’m getting at is that it’s kind of big transformation between myself and my relationship with money, what it means and what it’s suppose to do for me. When I got out as a single person, not being married, I just want to make this ton of money. Now, it’s more of I use money as a tool to get me where I want to go, which was being financially independent and not so dependent on that income.
It’s kind of all those combination of factors that led me into the whole thing. What’s happening is that I saw some of my colleagues that were miserable that they’re doing all these shifts and they’re not going anywhere. A lot of physicians are very frustrated right now about all the stuffs that are happening that they’re losing autonomy and for me this is the way to say: “Hey look, I felt the exact same way, but there is something that you can do about it, which is to transform your relationship with how you view money and what it’s all about.”
Jeff: So you were in clinical practice, you kind of fooled around and found out that you weren’t great at it that you made a lot of mistakes. How did you go from being a novice to somebody who is now running a business in which you’re doubting your expertise in this area?
Dr. Mazumdar: That’s a good question. The first thing I had to [inaudible – 00:31:08] with is, how do I get from working a full-time emergency medicine shift per month to doing full-time financial planning? How do I get from point A to point B? I didn’t know where to begin because I thought that all I had to do is [places inaudible – 00:31:28] all these places that everybody knows about and get some sort of training there and just become a financial adviser. I think what happened from what I recall six years ago or so when I started this whole process is I came across a group which was called National Association of Personal Financial Advisers (NAPFA). NAPFA is kind of the short term for it.
Most people have never heard of NAPFA and there is a good reason for it. This is an association that basically said that there’s something wrong in the financial service industry, which is that advisers are paid by commissions. Why should it be like that? Why can’t the client pay the adviser a fee directly? And that resonated with me huge because these physicians had advisers that were commission based and had inherent conflicts of interest. I said: “I need to contact people in this group. How do I do that?” So it turns out that NAPFA all across the US and usually in the major cities have these study groups and [inaudible – 00:32:34] study groups here in Atlanta. And I said: “I’m a physician and I’m interested in financial planning. I really don’t know how to make this transition from what I’m doing now to what I want to be doing.” So, I started going to study group meetings, meeting a ton of independent advisers or called [inaudible – 00:32:53] advisers. And I started integrating a bunch of them and say: “What would you suggest for me to get from point A to point B?”
Jeff: So your goal really was to move from clinical practice to full-time financial adviser for physicians.
Dr. Mazumdar: Not when I got a residency, but as my passion grew for all this stuff and all the other things that happened to me in my personal life and seeing other physicians then I made the decision. This is what I would do because I love it so much. There’s a saying, I think it’s some sort of a Chinese proverb or something, where it said: “ If you choose a job you love, you’d never have to work a day in your life.” And the way I look at financial planning and wealth management is that I love it so much that I don’t feel like I’m working and that’s the best I could ever have. When you feel like you’re not working but it’s a career, that’s where I want to go.
Jeff: So do you think you chose the wrong major in going to medical school?
Dr. Mazumdar: The actual science of medicine I think is still fascinating. When I see a patient, I take care of the patient and everybody else leave me alone then fine. It turns out that whether you’re working in the E.R. or other professions you don’t actually practice medicine that much on a daily basis. Most of it ends up in administrative stuffs that I didn’t sign up for, stuffs that I didn’t even think that should be in my job description. It turns out that a lot of things that we physicians do now are really should be the job of somebody else. So it’s kind of a loss of autonomy is the way I look at it.
The other thing in emergency medicine in particular was that I felt like that we had accountability and responsibility without authority. Meaning, we were blamed for things that were beyond our control, but we couldn’t change anything because we don’t have the authority to do so. To me, it wasn’t the right way to treat physicians. It wasn’t a matter of arrogance or some sort of ‘I’m better than somebody else’. It’s more of ‘If I’m the one who’s seeing the patient, then I should be the decision maker not somebody else’. And if you take that aspect away, the whole patient- physician relationship breaks down. You can’t have something where the physician seeing the patient and somebody else who is non-MD is telling me what I should be doing and me not having the authority to change anything.
Jeff: Do you think that’s a characteristic of emergency medicine that does not extend into kind of private practice or private clinics?
Dr. Mazumdar: It’s absolutely true in emergency medicine, but it’s filling over a lot into other specialties as well. For example of that would be a big trend that is happening now (for example: cardiology, internal medicine and so on) is that it used to be in 10 years ago that you have these small physician practices and now what they’re doing is the hospital practices are buying out these independent practices. So it used to be when you drive on the highway and you’d see just regular billboards. And now what you’re seeing is these billboards that are advertising physicians’ groups and have stick those faces of doctors on there, would not even put on the name but just the ‘such & such’ hospital physicians’ group. I can’t imagine a scenario where the physicians in those groups would have a huge amount of authority.
Jeff: Well let me ask you this because you bring up a very interesting point. Is that the most efficient way to deliver health care? Is it more efficient to have consolidation as oppose to a kind of myriad of independent physicians? Is the delivery of medical services made more efficient by that kind of model?
Dr. Mazumdar: Good question. I’m not sure what the answer to that particular question since I would not have anything to backup any sort of data with evidence. But from my perspective, let’s say it is more efficient. I think the bottom line is that it ends up becoming less personal than what it used to be when you had these smaller practices. I think a lot of patients are even saying so, like when I worked in urgent care as well as I used to work in the E.R. A lot of patients would come in and end up [inaudible – 00:37:29] doctors, but it’s become a lot less personal, which is really not what medicine should be at least from a patient-doctor perspective.
I don’t know exactly the answer to that question whether it’s more efficient or not. Plus, it depends on how you define efficiency whether it’s number of patients per hour or it’s reduced cost or what it is. To me the disturbing trend is the loss of autonomy that physicians have experienced not just in emergency, but what I’m seeing for other specialties as well.
Jeff: Which is why Medical Spa MD has so many physicians now that were not thinking of cosmetic practice when they went through medical school, they were chiropractic, E.R. doctors or internist and have now moved or migrated towards cosmetic medicine as a way really to gain control just that kind of autonomy, to get rid of third-party reimbursement and all the insurance and those types of things, and gain a more tremendous amount of control of their finances and lifestyle and be able to set that themselves.
So you made a kind of transition, but you’re still practicing clinical medicine. Is that because you had the need to do so? Or, you just kind of desire that and you feel that you’re really balancing these two kinds of career paths and are able to that?
Dr. Mazumdar: I think there are two reasons. One is you go through that training and it’s more like an insurance policy. Let’s say something happens and this financial planning business fails. As a financial planner myself I better have a plan or a backup plan for myself just like I advise the clients for their personal finances. So that’s one issue.
The other issue is since that my other niche market is specifically mid-career physicians I think it would be a mistake for me not to work a couple of shifts a month to know what the challenges and trends are in medicine field. If I completely just stopped, ended financial planning 30 days a month then the concern I have is that if I want physicians, specifically mid-career physicians, as clients it’s much easier for me to relate to them if I still am in that profession and know what the challenges are, know what the trends are, know what the frustrations are. That way I can convey that to clients say I’m one of you; I know what you’re going through. I see it. I still practice and I can relate to it.
Jeff: You decided to target mid-career physicians for what reasons? Is that because that’s where the belly of the market? Is that a business decision on your part? Or was it because you feel you’re in that kind of group? Is this the kind of relationship that you have?
Dr. Mazumdar: To specifically answer your question, it’s kind of a little bit narrower than that. First I started this concept ‘Okay, I’m going to have physician clients and that’s my market’, but it was still too big. Then I said: “Who are the people that I really relate to?” And of course the people I relate to are the people like me, which are mid-career physicians.
The people who are on the residency training I can [inaudible – 00:41:04] very well that perhaps they need more financial advise and maybe they have more need for advisers than anybody else. If you can prevent huge mistakes that early on, you’d be much better off. The only downside to people who just started residency training is they’re in a huge amount of [inaudible – 00:41:27]. A lot of them don’t see a need for an adviser and frankly a lot of them just don’t want to pay a fee to anybody. But the people who are mid-career, the ones who started families or several years out of training, generally 5 to 7 years or more out of training, who now have all these complex issues, What happens if I die? What happens to my kids? Am I saving enough? They got college thing and living. Now they got a state planning issue. These are the exact same issues that I faced personally for my family. And so for me you’re right. Mid-career physician is part of a group that I’m part of and so for me it’s easy to relate to them.
People who are pre-retirees or nearing retirement, certainly I don’t necessarily exclude them, but I can’t relate to them as well as I can to people who are kind of mirror me and the challenges I face currently.
Jeff: You mentioned avoiding the mistakes after you graduate. What are the mistakes that physicians commonly make?
Dr. Mazumdar: That’s a good question. Actually, that’s one of the things I’m going to talk about in the conference. To give you an overview, if I have to choose a couple of huge mistakes that physicians make in their personal financial planning, the first one is that they don’t have a plan. And what I find a kind of ironic about all that is when I plan a medical school and college and residency we sort all of this, ‘here is where I want to go, here’s the plus and minuses of this program and that program’. And we start looking for job using the pluses and minuses in going here or going there, but when we get out, all of a sudden we don’t have a plan at all for our personal finances.
And by a plan, a lot of people just say: “I’ll just pick a couple of stocks and do this and the other”, but none of that is really integrated. And so the biggest mistakes is that people don’t have a comprehensive financial plan for themselves that integrate such an investments, but protecting their wealth, growing it and of course openly transferring it when they die. Those issues need to come up pretty much as soon as you got out of the training and I haven’t really found physicians that have done that. That’s one big mistakes of not having a game plan.
The second is overconfidence. This goes back to my personal experience, which is I thought: “I can do this myself because I went through all this training. Surely, doing this financial stuff is easy.” When all the surveys done 80% of drivers think that they’re above average drivers, but it’s mathematically impossible. And if you look at the physicians, they suffer from an overconfidence syndrome, which is ‘hey, I can do this myself’. And they get into all these speculative investments, all these things that they probably don’t need and a lot of them get burned.
One of the huge other thing I’ve mentioned before is choosing the wrong adviser, which is one of the wrong advisers turns out is yourself. A lot of people try to do it themselves and make huge mistakes. On the other hand, it’s kind of a [cast 22? – inaudible – 00:44:55] because if they hire somebody then the chances are huge that they’re going to get somebody who’s not really acting in their best interest.
Jeff: It sounds that you have very little trust in kind of the rank and file financial kind of the systems that are in place for most Americans. Is that accurate?
Dr. Mazumdar: Absolutely! You would be surprised from the egregious, absolutely horrendous things that I’ve seen from prospective clients I’ve met, who were all physicians, and at the stuffs that their previous advisers that come to me. I look at some of the stuffs and say: “Gosh!” If we were physicians doing this to patients, we’d be in jail.
Jeff: And what examples would that be?
Dr. Mazumdar: Here is a great example and this example I see just routinely over and over again. You have a physician. As an adviser I look at their portfolio, focusing on their investments for now, and it’s kind of mismatch of different funds here and there. One of the things I ask prospective clients and even my current clients is: “What fee are you paying to your advisers?” And the number one response I get is: “I don’t know.” To me, that’s a big red flag right there. If you don’t know what fee you’re paying to your adviser and he hasn’t told you, there’s something wrong. And to me, not disclosing fees upfront is one of the biggest things that really makes me mad because you really don’t know whether you’re adviser is really acting in your best or not.
Jeff: And so if you’re a physician, what are the questions they should be asking if they’re interviewing a financial adviser?
Dr. Mazumdar: That’s a good question. The first and probably the most important question is ‘how are you paid?’ The most common fee structure is commission based by far. Advisers are paid by the transactions they make and the products they sell. For example, you could have insurance agents that mask as financial planners who sell you initially insurance products and then go around and sell you mutual funds in your investment account [inaudible – 00:47:17] with the commission and the kickback that they get, but they don’t actually disclose the fee.
The first thing you want to ask is, how are you compensated? If it’s commission based, you got to have your antenna up because you know if this person is going to advise me, how can he possibly advise me in an un-objective manner? They’re just trying to sell me products.
The second is fee based, which is not the same thing as fee only. Fee based is the combination of charging commissions and fees directly, but again there’s an inherent conflict of interest there because it’s still part of the commission based. Then there’s fee only, which is kind of like the CTA that basically says: “I’m the financial planner and I’m going to charge you this dollar-amount fee. I’m not going to get paid by any third-party and these are the services you get from me. That’s it.” The first thing you want to ask is: What are the fees that you’re paying?
The second thing is: What kind of education and training do you have? You’ll be shocked at this, but there’s really no formal education training required to become an investment adviser. You basically go up to your State’s Securities Department, sign an application; you take a short test some basic legal stuff and in about two months you can call yourself an investment adviser. So what you want to look for is a bit more of a formal pathway and the best I know of is a certified financial planner curriculum and program, which really focuses on not only in investment planning, but kind of integrated that with retirement planning, state planning, insurance planning, education planning and other things.
Jeff: So are there any financial planners who were paid based on performance?
Dr. Mazumdar: It depends what you mean by performance. There’s two ways to define it. If you strictly define it as ‘you’d be paid by a percentage of the gains’, the answer is yes. There are some that are out there that those, for example me as an independent, I can’t do that. I’m not allowed to get paid by specifically charging fees based upon performance.
The common ways to do it are, at least at the investment side, a percentage of assets in their management or flat hourly fees is another model that you can do. I guess technically a percentage of assets could be technically performance fees, but the way that the SCC, which is my regulatory body defines it is a percentage of the games that are made and I’m not actually allowed to do that. There might be other people that do that. Heads and managers for example do that and they’re not really regulated by the SCC at this point.
Jeff: What are the physicians who are more successful with their financial planning? What do they have in common?
Dr. Mazumdar: First of all, I think it’s a very small group. Most of the people I’ve met… Sure they might make high income [inaudible – 00:50:27], but having high income and being successful I think are two separate issues. If you’re spending all the money that you’re making, you’d probably not accumulate enough assets where you can call yourself financially successful. But the common traits that I see are one having a [inaudible – 00:50:47] of plan and place.
The second thing that I’ve noticed are people who basically say: “You know I’ve realized that I can’t pick the winning stocks. I can’t time the stock market. I can’t pick the winning managers. The best I can do and what all the academic research says I should do is, match the market.”
The third, of course, is staying disciplined enough to stay with the good times and bad. As well as kind of taking the approach: “You know, I really don’t know what the future holds. It’s completely uncertain. I don’t know what my income is going to be. I don’t know if I’m going to be disabled. So I’m going to leverage time on my side and, of course, increase my savings to make sure that I have enough to retire on.”
So it all sounds kind of basic, but you’d be surprised that most physicians don’t do those things.
Jeff: So you brought up another interesting point, which is matching the market. Why would I need a financial adviser? And why wouldn’t I just invest the money that I’m willing to put in the market, whatever percentage that is going to be, and have them match the [PSP500? – inaudible – 00:51:59] or invest in the matching fund?
Dr. Mazumdar: That’s a good question. I think if you look at all the data that’s done in this issue… exactly answering this question… OK, here’s a great study. It actually comes about once a year, maybe once every two years. It’s called the [Dalbar Study - unsure term – 00:52:15]. Here’s what it basically says. It says: If you take the past 20 years and if you just stuck with the market, this includes 2008 & 2009 and all the bad things that happened in the past decade, if you take the past 20 years, you’re just basically stuck with everything. You still will have a pretty decent rate of return, around 8% a year.
It turns out that the average individual investor… their return in the past 20 years, and the way that it’s calculated is based upon mutual fund cash flows across tens of thousands of different accounts and different custodians, the average individual investor got a rate return under 2% a year. The market return of about 8% a year… the average individual investor got a return about 1.8% a year. It turns out that inflation is about 3% a year.
So basically the conclusion there is that investors, when they do it themselves, are getting in and out in the market exactly at the wrong time. They’re essentially buying high and selling low. And so one of the value of an adviser is basically discipline. And people tell me: “Do I really want to pay for discipline?” And my answer is: “Actually that’s the number one thing you should be paying for because your own worst enemy is usually yourself. And all the data show that.”
But then there are always other issues like: Investment is one thing, but how do you integrate that with state planning? How do you know if you have enough life insurance? How do you if you’re saving enough? How do you know this from the other? And it’s kind of like medicine. It’s too vast of a field for somebody who kind of sit down and have the inclination to do so and really figure it out.
Jeff: What if you’re inherently not risk adverse? How do you kind of handle clients that are attempting to do things like start new businesses and grow their way to financial success?
Dr. Mazumdar: It’s kind of way that’s for example… If one of the goal of the physician is, let’s say, they don’t want to work full-time in clinical stuffs and they want to open up some other business, there are questions: How do you get there? How do you get from doing from full clinical stuffs to opening up a new business? Or whatever is that your goal is.
I think one of the key things that people have to consider is getting their financial [house? inaudible – 00:54:50] in order before they make that jump because like any other business, even for example for me personally, making a jump from clinical medicine to doing this you kind of have to make sure that got enough saved up and that you can weather out some of the lean years, where you can do marketing and have all of these expenses that you didn’t have before.
So one of these key things I think, if anyone is considering a career transition, is to make sure your personal financial situation is in order before you make that jump because you could get burned if something fails.
So you know my take on it is that one of the key things you got to have in place is your own personal financial situation being squared away before you can say: ‘Okay, I want to start this business.’ Or, do this or that or the other. Or, go part-time or whatever it is that you want to do.
Jeff: How long does it take for a physician, who comes in and is in that state, to get his financial [house? inaudible – 00:55:51] on order?
Dr. Mazumdar: Yeah, that’s a good question. The way I tend to look at wealth management is it’s not a one-time event. It’s more of an ongoing, dynamic process that is ongoing over the lifetime of that client. So, it’s not just the matter of ‘Here’s where I’m now. We’ve got everything organized, reinvested. You’ve got the appropriate insurance in place. You’ve got all the stuffs. Okay, goodbye. We’ll see you in five years.’
That’s always something happening. An example of that would be, and these are real examples for clients that I have, is one person buys a new house. Now you got to look at the assets protection stuffs, home owner insurance, and umbrella policies all over again. Another client… their group from one [inaudible – 00:56:40] plan, switched from one custodian all the way to another custodian and now their investment option’s completely changed so you have to redesign the entire portfolio.
You know… having a newborn. That’s going to create issues like: Do I need now more life insurance? How do I fund this person’s college, if that’s one of their goals? So it’s something always going on that requires monitoring of these, which kind of answering your question.
What I found is that, especially, in the first year of engagement is huge because you’re establishing trust with the advisor and the advisor establishing trust with client. And getting in all the stuffs that are generally disorganized usually takes about a year or a year and a half to kind of go through and get everything squared away. And it really depends on the situation.
For example, one client I’ve had who had eight different checking accounts, I’m not sure why, and then had all those scattered investments that weren’t sort of integrated with each other. And then I’ve had other clients who had all these variety of life insurance policies from way back when that they’ve never looked at in years. And the question is: Do you really need these?
But roughly, the first years are really something that takes about a year or a year and a half to really organize everything and simplify it. And then it’s more of an ongoing relationship where you’re managing the investment portfolio and of course you monitor the goals of the client and make sure we’re heading the right direction
Jeff: When you moved over and started this business, what were the first steps that you took? You basically set out a shingle. How did you start marketing? How did you grow your business? What was your plan?
Dr. Mazumdar: What happened is when I went [inaudible – 00:58:39], I started taking these Certified Financial Planning courses, that was, I believe, back in 2006. And then I didn’t feel comfortable going out on my own after I passed the CFP courses on the CFP exams. So what I did was I worked for a wealth management firm here in Atlanta before I went out on my own. One is to give me confidence, but the other issue is I wanted to kind of see the inside business workings of actual fee-only financial planners and see: What were the marking challenges? How do they get clients? How do they conduct meetings? All those sort of issues… And they gave me an idea the way I want to do it.
I actually started this firm in January this year so this process is still being refined even as we speak. But basically, the first ever clients who came onboard were people actually that have been reading my columns. I write in one of the E.R. magazines for the past three years. And a couple contacted me and said: “Hey, I’ve been reading your columns and I noticed that you started this financial planning business.” And they came onboard as clients. There are others that heard from other people that I was doing this that came onboard as well.
It’s always marketing. Probably the biggest challenge for me is how I get the word out because there are not really that many physicians that are financial planners. So the key for me is marketing towards how I get the word out. You know, I’m one of you and this is kind of unique thing.
Jeff: Do you find that physicians respond well to that, in fact that you’re an MD as well?
Dr. Mazumdar: Yeah. I mean there’s an instant connection especially in emergency medicine, of course since I’m one of them, but even for other physicians in general. But one of the things I’ve noticed is, physicians are just so busy with their career and other things going on that they kind of don’t have their personal financial planning on the [inaudible – 01:00:39] a lot of times. Their excuses are always: “I want to do this later.” Let’s face it, who wants to really look at their will?
Jeff: It is a little like tax.
Dr. Mazumdar: Yeah, exactly like taxes. Who wants to look at their will? it’s not fun. Who wants to look at an insurance policy? That’s not exciting. To me, it’s exciting because I enjoy that stuff. But for most people: “I’m just doing to deal that later.” And I think on the surface, people know that it’s important. It’s kind of like diet and exercise. You can tell somebody all day that the key to losing weight is to take in less calories and exercise more. But, how many actually do that?
It’s the same thing here. “I know getting a will is important and I know getting a portfolio together is important, but that’s just not something I want to do.”
Jeff: So let me ask you. As a career, are you able to make more money as a physician? Or if you’re successful as a financial adviser, is that a more lucrative career?
Dr. Mazumdar: That’s an interesting question. One, it depends on the number of clients of course and the fees that are charge per client. But here’s kind of the way I look at it, this is my take on the whole thing, my take on income is very different from the way it used to be. It used to be, I was just looking at ‘Okay, here’s the dollar amount I’m making per month’ and that was it. Now I see income more of ‘here’s the dollar amount I’m making divided by the frustration factor’.
And so to me, high income to me basically means the highest amount of income per frustration factor. And I can tell you that what I’m doing now is so much more fun than doing in the E.R. shift, with all the challenges of working in the E.R. Yes, my absolute income, even when I get up to the number of clients I want, will probably be less than if I just work full-time in the E.R. But from my prospective, when you take in to consideration all the frustrations, there’s far less frustration here and it’s a lot more fun. I actually think I make more if you know what I mean, when you do it relatively to lifestyle.
Jeff: As a final thing, is there anything that you kind of want to mention? In the discussion that we’ve had, is there anything else that’s kind of come up that you might want to throw as a nugget of wisdom?
Dr. Mazumdar: The way I kind of look at the… especially since the conference and everything and what you’ve got in Medical Spa MD, I think the one thing I have to say is: If there are physicians that don’t like what they’re doing right now for whatever reason, whether it’s income going down or they’re frustrated with paperwork or admin stuff or malpractice or whatever, what I would suggest is that don’t do something else just to get out of the other thing that you’re doing. Do something else because you have a true passion for it.
So if you don’t have true passion for this other career, whatever career it may be, then you’re ultimately going to not like that either. And the thing I’ve found is, if you have a true passion for doing something, then it becomes much, much easier to motivate yourself to do it. That way you’re not miserable in the second thing you did. You’re actually enjoying it and living the life that you want to live.
That’s kind of the biggest things that I probably have to say for anyone who is considering transitioning from a full-time clinical career to maybe a part-time clinical and full-time something else or full-time something else.
END OF INTERVIEW
Andy: Well that’s it for the show. Thank you very, very much for listening and I hope you enjoy it. Of course, we would like to have feedback. So if you got questions or comments, the Email address is Podcast@MedicalSpaMD.com. Or, leave a comment in the physicians’ forum at the website.
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So that’s it. It’s goodbye for me, Andy White.
Jeff: And goodbye for me, Jeff Barson.
Andy: Wishing you the best until we see you next time on Medical Spa MD.