A Physician Family Office for high net worth families

As a middle-aged physician all too aware of the fact that we are all merely “passing through” life on our way to somewhere else, I am increasingly concerned with having a good work-life balance.  Gone are the days of my residency when I was only able to catch a couple of hours of sleep here and there and be lucky to have the time to eat a fast food meal for lunch or dinner.  At this point in my life I want to take care of my physical and mental health and diminish the amount of stress that I have.  Don’t get me wrong—running a practice is always stressful but there are new ways to diminish that stress and new ways of working that physicians can now take advantage of.

The new way of working I am referring to has to do with learning to “let go” and have others assist you so you have the time and energy to do the things you enjoy, like spend more time playing golf or with your family.  Family Offices have historically been a resource that only the ultra-wealthy have been able to utilize.  A Family Office is a professional entity set-up to manage the investments, business affairs, and philanthropic interests of high net-worth families.  With the growth of Multi-Family Offices the past few years, it is now possible for less affluent, high net-worth families to join Multi-Family Offices.  There are now Specialty Family Offices for celebrities, athletes, and most recently, particular types of professionals with unique needs such as physicians.

What I love about being a part of a Physician Family Office is that, as my needs change, I can tweak my own individual “menu” of services so my family and I only receive the services we really need at any given point in time.  For instance, I am increasingly focused on estate planning and setting up my affairs so I can leave the maximum amount of money, tax-free, to my family.  In addition, I want to make sure all of my paperwork is in order so that, when the time comes, my family does not have unnecessary stress trying to figure out where all of my assets are. In fact, my Physician Family Office maintains a Balance Sheet of all of my assets and liabilities on a secure and private Family Website which is updated every day and which my wife and I can view as often as we like so that we can see how our financial picture is changing over time.  This results in much more intelligent decision-making on our part.  The Family Office also houses electronic vaults in which a family can store important financial and personal documents including everything from family photo albums to passports and birth certificates.

Another, perhaps, younger doctor with small children might be more interested in asset protection rather than estate planning.  A Physician Family Office can provide all of these services and dozens of others, including asset management, asset protection, financial planning and practice management, among others.  A Physician Family Office can even help you sell a piece of vacation property you might own elsewhere or plan your family’s next European vacation. Making your life easier and less stressful is the name of the game at this stage of life.

Also, having all of your service providers under one roof is a big plus because they are then all working together with an understanding of what my family’s goals are.  I don’t have to spend the time picking up the phone and telling my attorney what my accountant is working on or vice versa.  They coordinate as much or as little as we want.  I also believe having everything coordinated and organized in one place has saved my family money.  When you begin a relationship with a Physician Family Office you have an opportunity to discuss your family’s goals and develop a mission statement which addresses your personal investment, business, philanthropic and lifestyle goals.  It tends to get all family members on the same page and sets expectations.  This process increases the odds that the wealth I worked so hard to amass will be passed on to future generations.  A Specialty Family Office such as a Physician Family Office will already be aware of the challenges your family may be facing, financially or otherwise.

Another important advantage of a Family Office is that, unlike traditional wealth management firms, it does not sell any products or services or charge any commissions.  It is truly a service-oriented entity with the sole mission of putting your family’s needs first.  It strives to ensure you only invest in those products that are aligned with your financial goals and values and which will benefit your family the most.  The same cannot be said for financial advisors, stockbrokers, and insurance salespeople who are incentivized to recommend the product or service that will pay them the highest commission.  Some Family Offices believe they can save their families 1-2% of their assets each year, in unnecessary fees, expenses, and perhaps even more by avoiding inappropriate investments.

Medical school and training certainly did not include even a rudimentary course in finance or money management which many physicians would find helpful with issues such as debt management, starting a practice, first time home ownership, etc.  Medical doctors are highly specialized professionals with many years of training and although most of us are smart, we cannot know everything.  It is important, professionally and personally, to be aware of what you are good at and where your blind spots are in terms of the areas you don’t know or fully understand.  You can then go to the appropriate expert, or a slew of experts, as is the case with a Physician Family Office, and be taken care of.  Not only does having constant access to professional investors, legal, accounting and business experts save me a significant amount of time, it affords me the luxury of sleeping better at night as well as enjoying that occasional extra golf or tennis match.

Arnold C. Friedman is a radiologist and is is a Founding Member and currently on the Advisory Board of The Abernathy Group II’s Physician Family Office. 

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