Evidence-based dentistry for patients and evidence-based planning for dentists
As 2019 enters the annals of history and we prepare for 2020, it’s time to reflect upon what went well and what we can improve in the coming year. Specifically, while reading this column, reflect on whether you met your financial goals. Consider whether you can simply replicate another year of success or if changes are necessary to achieve better outcomes. To stimulate some financial contemplation, let’s start with a dose of moral philosophy.
As children, we all learned the golden rule: Treat others as you want to be treated. That principle has revealed itself in belief systems for centuries, and the concept is not exclusively rooted in religion. Celebrated philosopher Simon Blackburn, a self-proclaimed atheist, located evidence throughout his vast societal research that the golden rule is “found in some form in almost every ethical tradition.”1
Simply stated, expected societal norms dictate that humans should care for one another in the best way possible, exercising a spirit of reciprocity. The dental profession reflects an important and essential facet of the golden rule through ongoing encouragement for practitioners to provide evidence-based dentistry (EBD), which “integrates the dentist’s clinical expertise, the patient’s needs and preferences, and the most current, clinically relevant evidence. All three are part of the decision-making process for patient care.”2 Such treatment sounds great. So great, in fact, that it describes exactly the way I would want to be treated as a patient.
When assuming the role of client to a financial advisor, dentists deserve comprehensive treatment across the spectrum of their financial lives through evidence-based planning (EBP). EBP is the integration of academically rooted, credentialed guidance from an advisory team, a personalized plan aligned with your values, needs, and goals, and the relevant advanced planning through data and research—all combined to pursue the best possible outcomes for your financial future. How does that financial treatment plan sound?
To help illustrate what EBP looks like in practice, let’s review some assertions that may reflect anecdotal opinions or recommendations made in isolation and not rooted in evidence.
• Stocks have been in a bull market for a decade; it’s time to cash out.
• Interest rates can only go up from here, so don’t invest in bonds until they do.
• Our analyst thinks these three stocks will outperform the market.
• This loan is the best because it has the lowest interest rate and the shortest term.
• Don’t invest until after your student loan debt is paid off.
• The most you can put into a 401(k) is $19,000, or $25,000 if you are over 50.
• You earn a high income, your taxes are going to be high; it’s just the way it is.
• This 401(k) plan has an annuity, so you can rest easy with a guaranteed return.
• Whole-life insurance policies are great investments.
• We run financial planning projections to age 95 for everyone, to be consistent.
If you have heard any or all of these suggestions or comments, the provider may have placed his or her own personal benefit ahead of yours.
Taking the following steps can greatly increase your chances of benefiting from EBP.
Step one: Only work with an advisory team that includes a professional who is a certified financial planner (CFP). According to the CFP Board, “Although many professionals may call themselves ‘financial planners,’ CFP professionals have completed extensive training and experience requirements and are held to rigorous ethical standards. They understand the complexities of the changing financial climate and know how to make recommendations in your best interest.”3 Rely on professionals who have chosen to complete formal education, passed a comprehensive exam covering the spectrum of financial topics, satisfied minimum experience requirements, and are subject to rigid ethical standards.
Step two: Only work with a wealth advisor who also operates in a fiduciary capacity at all times. Again, according to the CFP Board, “The fiduciary standard of care requires that a financial advisor act solely in the client’s best interest when offering personalized financial advice.”4 If the fiduciary role sounds logical to you, and the right way to conduct financial business, ask your current or prospective advisor if he or she is always working in a fiduciary capacity. If not, that provider can act within the lesser suitability standard, which allows an advisor to benefit financially by offering one product over another. Be treated by a provider who chooses to always act in your best interest and who tailors a plan to your unique circumstances.
Step three: Credentials and client-first treatment alone will not ensure that a financial planner is providing EBP. You deserve to have your advisor offer evidence-based strategies rooted in research and data, and then objectively seek benefits available to dentists as practice owners. Your advisor should approach practice and personal finances in an integrated fashion, particularly because the bottom line of your business results matches the top line of your personal income. Your advisor should strive to minimize federal, state, and local taxes so that you can retain as much of your earnings as is allowable within the parameters of the law. Your advisor should ensure that you are paying yourself first by saving the amount you need, in a tax-efficient manner, for your long-term objectives.
Your advisor should diagnose where your cash is going, then offer solutions for where it could be going to better align with an overarching plan for achieving your goals. Your advisor should help you prioritize needs, wants, and savings within your practice and personal life, while also helping you implement an intentional debt-repayment strategy. Your advisor should take a comprehensive approach to investing that diversifies against risk, keeps costs low, and aims to achieve the returns necessary for your long-term financial health. Your advisor should help protect your plan through the right kind and level of insurance for your practice and family—yet not encourage more coverage than is required. Lastly, your advisor should help ensure that your estate documents allow others to act on your behalf when you cannot, and that named beneficiaries match your legacy desires.
A new year affords a natural opportunity to determine if you’ve been receiving evidence-based planning, or not. If you have not, commit to taking the preceding three steps. They can change your course for this new financial year and for decades to follow, even as the dental profession continues to evolve. Once you’re on the receiving end of evidence-based planning, perhaps you can regard it as societal reciprocity in the spirit of the care you provide as an evidence-based dentist. That sounds like a pretty good rule to live by.
References
1. Blackburn S. Ethics: A Very Short Introduction. Oxford, United Kingdom: Oxford University Press; 2001:101.
2. ADA Center for Evidence-Based Dentistry: About EBD. American Dental Association website. http://ebd.ada.org/about.aspx. Accessed September 20, 2019.
3. CFP® Certification: The Standard of Excellence. Certified Financial Planner Board of Standards website. https://www.cfp.net/about-cfp-board/cfp-certification-the-standard-of-excellence. Accessed September 20, 2019.
4. Public Policy: Fiduciary Standard. Certified Financial Planner Board of Standards website. https://www.cfp.net/public-policy/public-policy-issues/fiduciary-standard. Accessed September 20, 2019.
Rob Ziliak, CFP, is the chief experience officer at Buckingham Strategic Wealth, a comprehensive wealth management firm with a niche practice area that focuses on financial solutions for dentists and their families. Through a holistic, evidence-based approach to strategic planning, Buckingham helps dentists connect their finances with their values to realize their most important goals. Buckingham also offers ADA CERP–recognized continuing education courses for dentists. To learn more, visit buckinghamadvisor.com or call (888) 470-3064.
