Experts Warn of 4 Pitfalls Every Medical Professional Needs to Avoid; “Malpractice of the Financial Kind” Common Problem for Doctors.

WASHINGTON, D.C.///March 30, 2004///Most medical professionals know full well what to do behind a scalpel, stethoscope or microscope, but many do not know how to “operate” when it comes to their personal financial matters, according to three fee-only investment advisors from across the United States. The advisors outlined the four pitfalls common to the financial dealings of medical professionals and also advised how to avoid them.

The financial advisors – Carlson Capital Management (CCM) President Gregory Carlson (Minneapolis and Northfield, MN); J.E. Wilson Advisors President James Wilson (Columbia, S.C.); and Petersen Hastings Investment Management Vice President Scott Sarber (Kennewick, WA) – are all members of the Zero Alpha Group (ZAG). ZAG is a nationwide network of eight fee-only investment advisory firms that manage over $3.5 billion in assets.

CCM President Gregory Carlson said: “Some of the personality traits that are necessary to make medical professionals truly outstanding in their field – the ability to make snap decisions, shouldering the responsibility for hard choices and a well-developed sense of confidence –can be downright counterproductive when it comes to handling personal finances. These traits tend to work against doctors and surgeons who are too quick to assume that they can ‘figure out’ their financial picture for themselves.”

“I would never think of performing a medical procedure, but there is no shortage of medical professionals who mistakenly think they know enough about money to handle their own complex financial situations,” said Petersen Hastings Investment Management Vice President Scott Sarber. “We sometimes find doctors that are up to their necks in the most bizarre financial schemes imaginable. In other cases, super-busy medical professionals may give zero time or attention whatsoever to their long-term financial needs.”

FOUR PITFALLS FOR MEDICAL PROFESSIONALS

Most members of the Zero Alpha Group specialize in providing financial advisory services to doctors, surgeons and other medical professionals. Over the course of dealing with hundreds of such clients, ZAG members have certain common problems that crop up over and over again when the men and women of medicine turn to a realm in which most do not know how to operate: the financial marketplace.

According to the ZAG experts, the four most comment financial pitfalls for medical professionals are:

• Investing in the “hot” new drug. Pharmaceutical company representatives touting the next “big” drug for their patients bombard physicians on a daily basis. Many physicians make the mistake of believing that a new medicine currently seeing heavy sales will translate into a higher stock price. “In nearly every case, the price of a drug company’s stock already reflects what their new drug offering is going to do in the marketplace,” said Petersen Hastings Investment Management Vice President Scott Sarber. “The doctor isn’t the only person getting this pitch from the drug company. Analysts, investment companies and other doctors are all hearing the same thing. The price is already set.”
• Obsessing about “cheap” debt. The average physician leaves medical school nearly $100,000 in debt. Some medical professionals work relentlessly to pay off that debt, even to the detriment of saving for retirement. “Education debt tends to be loaned at an incredibly low rate, usually below five percent,” said Carlson Capital Management President Gregory Carlson. “This is manageable debt – it shouldn’t be paid off while other more expensive debt piles up or while some of that money could be earning more in long-term financial plan. Instead, it should be paid down incrementally, while also saving for retirement and making prudent decisions regarding other investments.” At the same time, other medical professionals move in the opposite direction and, on top of their relatively inexpensive school debt, start using expensive credit to accumulate real estate, cars and other “toys.”
• Overcomplicating things. Many physicians are inundated with offers for complicated and sometimes even questionable investment schemes to keep their money safe from malpractice settlements and other financial difficulties. Most do not need expensive plans for asset protection. “You need an astronomical level of assets for the upkeep costs of offshore monies,” said J.E. Wilson Advisors President James Wilson. “Most doctors don’t need that. For one thing, malpractice insurance will cover most calamities, unless gross negligence is involved.” The tendency of medical professionals to get sucked into complex financial arrangements also explains why they are among the most alluring targets for con artists who peddle entirely bogus financial deals. Not only do doctors have the mind set that sets them up for such elaborate rip-off schemes, they have the money to make themselves huge targets for scamsters.
• Running out of time. Physicians are some of the busiest people in the American workforce. Actually setting aside the time to sit down with an investment advisor is difficult for them to do, but it is a necessity. The net worth and planning of medical professionals requires special attention and the time to make sure their plan is the right one for the individual involved. Too many doctors, surgeons and other medical professionals are so time-squeezed that they put off their long-term financial planning for years or even decades longer than is advisable.

ABOUT THE GROUPS

Founded in 1995, the Zero Alpha Group, which is not an investment advisory firm itself, was created to serve as a nationwide network for eight independent investment advisory firms that manage a total of more than $3.5 billion in assets. Members of the Group are committed to providing objective, long-term private wealth management solutions to investors, focusing on asset allocation and a structured, quantitative approach to investing. The eight firms in the Zero Alpha Group network share a common philosophy about investing and client service - a commitment to passive, tax-managed investment strategies while providing an independent financial planning solution for investors. Visit ZAG online at http://www.zeroalphagroup.com.

Carlson Capital Management is a fully integrated wealth management advisory firm. The firm integrates the disciplines of financial, investment, estate, tax, retirement and philanthropic plans into a comprehensive wealth management strategy. The firm serves high net worth individuals and families, business owners and non-profit organizations and serves as corporate trustee for clients through Carlson Trust Company. Carlson Capital Management is on the Web at http://www.carlsoncap.com/.

J.E. Wilson was founded in 1982 as the first fee-only financial advisory firm in South Carolina. The firm provides objective, long-term private wealth management solutions to investors, with a special focus on the wealth planning and management needs of physicians and their families, using the firm's Integrated Economic Solution. ®J.E. Wilson Advisors is on the Web at http://www.jewilson.com.

Petersen Hastings, an independent investment advisor founded in 1962, manages assets through a strategy of asset allocation and indexing. The firm serves its clients - including retirement plans, trusts, non-profit organizations, foundations and established individuals - using its proprietary Disciplined Wealth Solution™ and Core Values Investment Program™, which is a solution for socially responsible investing. Petersen Hastings is on the Web at http://www.petersenhastings.com.

CONTACT: Patrick Mitchell, (703) 276-3266 or .