Many of Canada’s doctors admit their financial health is not being taken care of and they feel unprepared for retirement, a survey conducted by The Medical Post finds.
Of the 642 medical doctors who responded to The Medical Post‘s online survey, 73% say they use the services of some sort of financial advisor, but only 35% feel their advisors have created a comprehensive retirement plan for them. Only a slight majority (54%) think they’ll have an adequate income in their retirement.
“There are a number of physician agreements [with provincial governments] coming up in the next while, and I think doctors are very concerned about their financial health,” says Rick Campbell, editor and associate publisher of The Medical Post. The Medical Post, like Advisor.ca, is owned by Rogers Publishing Limited.
The survey started out as just one question about whether doctors needed government-sponsored pensions. Campbell says The Medical Post‘s website www.mdPassport.com received such an overwhelming response from its readers that it decided to conduct a broader survey.
Pensions remain atop the list of doctors’ financial concerns. Ninety-one per cent of respondents said they wanted some form of government-sponsored pension plan, to which they would be willing to contribute.
Campbell says other major issues came to light, as well. The Medical Post reports that many doctors plan to take advantage of a national shortage of MDs and postpone their retirement in order to build a larger nest egg. Forty per cent of the respondents say they’ll work past age 65.
“I find there are unexpected financial pressures, not unique to us, such as dependant children, separated children and needy grandchildren that have created a financial burden so that I need to continue working despite my semi-retired status,” wrote one 60-year-old doctor who answered the survey. “There is much more financial reward now in family medicine than any other time over the 30 years I’ve had my practice.”
The survey also found that doctors needed more information about insurance. Less than half (46%) feel confident they have adequate life insurance coverage, and even fewer (41%) say their advisor has discussed an insurance strategy with them.
Only 37% say insurance plays an important role for them in their estate planning, which might be related to the fact that 67% do not identify their financial advisor as a primary point of contact in their estate planning.
One area where one might expect doctors to have better-than-average insurance knowledge is in living benefits, since these types of products are directly related to their profession. Yet 68% of the respondents say they’re not well informed about either the features or benefits of critical illness policies. Out of the entire survey, only one doctor specifically commented on critical illness insurance, which he or she described as “immoral” because it covered only well-known diseases with short-term effects and ignored diseases with long-term consequences like multiple sclerosis. There were no specific questions about long-term-care policies.
When doctors do seek investment advice, it’s usually not from their banks; less than a quarter (22%) of the respondents say they have an advisor with a bank-owned firm. Fifty-one per cent of respondents have an advisor either at a non-bank-owned brokerage or at a financial planning firm.
The survey doesn’t reveal how many of those non-bank advisors are from the Canadian Medical Association’s in-house investment company, MD Financial, which provides its own advisors and line of mutual funds.
All of the respondents were either active or retired medical doctors, who voluntarily responded to the survey, and for this reason the margin of error is unknown. It should also be noted that 51% of the respondents were from Ontario.
Filed by Mark Noble, Advisor.ca, firstname.lastname@example.org