Concierge Wealth
My parents use a concierge doctor. They both love it!
I asked why and after several minutes I had to stop them - OK I get it! It made me think, if this approach is so
great why don’t wealth managers become concierges too? It is worth taking a look because we
share a similar clientele.
Shortage
The medical and financial services industries face similar
problems. Both have an acute
shortage of professionals. The Association of
American Medical Colleges (AAMC)
estimates, the United States will face a shortage of more than 91,500
physicians by 2020. The financial
services industry has lost 40,000 financial advisors since 2008 while at the same time wealth
creation has exploded. A survey asking why people aren’t applying for wealth advisor jobs produced a sobering list of
reasons. Neither group has a
credible plan to solve the problem.
My belief is that a Concierge business model can help because it approaches
the problem by addressing the patient and professional’s needs. Seems like a good place to start.
Service
People who can afford the additional cost of a concierge
doctor are affluent. They want an answer NOW and the
client load and the rigid appointment schedules of their doctors makes it difficult if not
impossible to meet their needs. The average primary care doctor has 2,400
patients and the average financial advisor services 500 families. The math doesn’t work for an immediate
response. The typical questions patients and clients worry about are simple but
human nature can cause the simple to become catastrophic unless doctors and
advisors nip them in the bud. The
pain in your stomach and the concern that you’re going to run out of money need
to be heard by a professional. Remember
when you had to tell your kids there were no monsters in their room?
Pioneer Memories
My
wife’s father was a great doctor.
Their home phone never stopped ringing with urgent questions from
patients. He was a concierge
doctor before the term was invented.
Today’s doctors have the same patient demands but they also must fill
out the invasive paperwork for the insurance companies to see if they will even
get paid for their services. Wealth
mangers receive the first call on a diverse set of items ranging from I lost my
passport on vacation to should I buy a plane? They also have the additional demands of the DOL. Concierge doctors have the same
demanding clients but fewer of them. A concierge doctor services 500 patients.
While this will solve the demanding patients’ needs, what impact will it have
on the doctor’s take home pay? A 2012 Medscape study found that the average salary for a
primary care physician ranged from $156,000 to $315,000, while Bloomberg
Businessweek reported that the average salary for a Concierge Physician ranged
from $150,000 to $300,000. The
pioneers might have resisted the change but the actual results show it was win-win
for the patient and the doctor. If
brave financial advisors adopt a concierge approach I would hope their
experience would be similar.
We seem to be fighting yesterday’s war with old tools
and beliefs. Let’s take down the
fancy diplomas on our walls and replace the tired magazine subscriptions to Highlights,
People and Business Week in our waiting room and replace them with iPads, a guaranteed
Open Table reservations system and a Concierge business model.
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