Financial advisors looking to serve physicians need to talk to as many doctors as possible—even attend their medical conferences—to understand the unique issues they face, says Michael S. Berry, an advisor who specializes in serving physicians.

Doctors are particularly in need of financial professionals because they have to run a business, as well as practice medicine, even though they did not study business in college, notes Berry, founder of Michael Scott Financial Group LLC in Newtown, Conn.

Operating a business and getting ready for retirement can present problems many doctors are not ready to deal with, Berry says. That is where an advisor who knows the medical business can help. Berry has developed a financial practice that deals almost exclusively with physicians, which he says is an attractive niche for advisors. He also is the co-author of The Physicians’ Money Manual and other publications.

“Advisors ask me all the time how I developed this niche practice,” says Berry. “In reply, I ask them how many medical conferences they have attended as a participant. You have to talk to doctors and learn what their problems are if you want to advise them.”

Doctors face several unique situations when it comes to operating a medical practice, he says. They are put in an unusual position because, in addition to owning their practice, they may own the building where their practice is located, he says. In addition, he says, doctors are becoming further involved in the business side of medicine as owners of pharmacies, a laboratories, billing and medical coding companies and other entities separate from their medical practices.

Each of these businesses creates a separate revenue stream that affects the doctor’s finances while he is practicing medicine and when he gets ready to retire, says Berry. Some doctors may want to sell their practice and some of the ancillary services but retain ownership of one or more of the businesses.

These types of moves take planning and require the assistance of CPAs, attorneys and other experts who know the medical profession, says Berry.

Another issue facing doctors is the high cost of medical malpractice insurance. Instead of paying a third party, some doctors will want to set up a captive insurance company to self insure against lawsuits, he says.

To do this and take advantage of tax breaks that are available for captive insurance companies, an advisor needs the assistance of a lawyer and an asset management firm that are familiar with medical malpractice and insurance, Berry says.

“The doctor or doctors’ group may want to get what is known as a private letter ruling from the IRS saying the plans for the captive insurance company meet actuarial standards,” he adds. “Many people think they can simply put all of their assets in their spouse’s name and they will be safe, but a good advisor can tell the doctor this is not so.”