Dr. Carolyn McClanahan, founder and director of financial planning at Life Planning Partners Inc. in Jacksonville, Fla., didn’t quit her day job when she initially launched her fee-only firm more than a decade ago. She was still practicing medicine part time in the urgent care section of an emergency room.
Today, she manages a little more than $100 million in assets for 78 client families (many of them multi-generational) while teaching other advisors to integrate health-care planning into their businesses. She plans to keep her firm small—her goal is about 100 client families—so she has time to stay closely connected with them, remain active in education and develop better processes for the advisor community.
Her advisory business differs dramatically from the mainstream of the profession. McClanahan, who specialized in family medicine and emergency medicine, accompanies clients with very serious health issues to medical appointments. But aside from asking clients what they do to take care of their health, she doesn’t typically don her medical hat until they have a major health issue, she says.
“We ask about health because that helps us do better planning,” she says. “You plan very differently for someone who has an unhealthy lifestyle or who already has significant health problems as opposed to someone who is very healthy and takes good care of themself.”
Life Planning Partners also helps assuage some of the biggest fears of its seriously ill clients: “Do I have the money to treat this illness?” “Is it going to decimate my family?” “Who will take care of things, including my finances?”
“I was a math nerd in high school,” says McClanahan, 51, who briefly considered becoming an actuary. Her role as an athletic trainer in high school and college eventually motivated her to pursue a career in medicine.
She began thinking about finances after earning her M.D. degree from the University of Mississippi. She opened an IRA as a low-paid medical resident, then helped her husband invest money he inherited from his parents who had died. “That was in the mid-’90s and we thought we were brilliant and we did fairly well,” she says. “Of course, everyone was brilliant back then.”
By 2000, the couple, then in their mid-30s, realized they needed more financial guidance. “We had this nice pot of money and were getting nervous and not really knowing what we were doing,” she says. They also wanted to know if they could afford for her husband to give up engineering to become a track coach. Finding a planner proved difficult. “Back then, especially in Jacksonville, everyone was pretty much a salesperson,” she says. “It was all about investments.”
So McClanahan started taking courses in financial planning and, she says, “I just fell in love with it.” She earned a certificate in financial planning, passed the CFP exam and worked a couple of years for an advisor while practicing medicine part time.
The firm where she cut her teeth was fee-only on the brokerage side but sold insurance products. “I realized they were good people, nice people,” she says, “but I can tell you, if you’re going to sell something and you’re going to make money on it, it takes away your objectivity.” She opened her own practice in 2004 because she wanted to be truly fee-only.
The first year, she worked out of her home and grew her practice solely by word of mouth. Friends and ER colleagues became clients because they wanted to work with someone they knew. “In medicine, trust is a big thing,” she says.
McClanahan joined NAPFA and met other advisors who were also very interested in being fiduciaries and providing comprehensive planning. Soon she started attracting clients who found her through NAPFA. “I was one of the first NAPFA members in a city of a million, and to me that was amazing,” she says.
By 2005, McClanahan opened a real office and quit practicing medicine for money. She still volunteers twice a month in the medical clinic of a homeless shelter. As time passed, she also started giving presentations, initially to her advisor study group and later at conferences, about issues at the intersection of health and finance.
Her first talk addressed how to help clients clean up their medical records to get better rates for life, disability and long-term care insurance. After the Affordable Care Act was passed, she spent two hours a night for three months reading its 2,400-page version and then put together a presentation that proved very popular.
McClanahan, who’d taught medical students and residents, was glad to teach again and to give back to the advisor community that aided her so much when she started out. “I picked a lot of brains and I realized after a few years that I knew stuff from medicine that could help advisors become better advisors,” she says. “I come from two different backgrounds, and there’s a lot of overlap in how we operate.”
Speaking invitations started pouring in; she estimates she has given more than 200 presentations to advisors. Other topics she covers include end-of-life planning and the integration of health status into financial plans.
She is also a contributing writer with Forbes. “They let me lay off this year because my house was eaten by termites,” says McClanahan, who has finally moved back home and has invited clients to attend her upcoming “termite recovery party.” Life Planning Partners also holds an annual paper-shredding party for clients and invites them to join the firm in community events it sponsors, including a 5K race that benefits economically challenged citizens in its county.