How one advisor helps doctors and pharmacists

David Boyd is vice-president, portfolio manager at BMO Nesbitt Burns in Windsor, Ont. About 30% of his book is doctors, 35% pharmacists, and the remainder a mix of professionals.

David Boyd has been surrounded by medicine his entire life—his father and grandfather were both doctors.

But Boyd decided not to follow them. He had an aptitude for numbers, so he got his securities license and met with his parents’ advisor, Phil Horn of BMO, who’d been in the industry for 35 years.

“Phil was looking for somebody and he offered me that job in a Chinese restaurant … and I never looked back,” says Boyd, vice-president, portfolio manager at BMO Nesbitt Burns in Windsor, Ont.

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Growing up with doctors gave Boyd an advantage when it came time to specialize his practice. Whether they work in emergency rooms or family practices, he says, doctors are process-driven and busy. “I’d call and they’d tell me they don’t have the time to discuss every move in their portfolios,” he explains. Clients would ask if there was a way he could be more active in managing their money. So he got his discretionary license, he says, which lets him serve clients without needing regular input.

And, when clients do have time for him, he’s comfortable meeting anywhere and anytime that fits their schedules.

For instance, he recently went to the hospital to meet with a surgeon and two emergency room doctors during their breaks. “I know my way around the OR,” says Boyd.

Evolving a niche

While building his book, Boyd saw the opportunity to branch out when a doctor referred him to a pharmacist. “There’s overlap in the professional world between the doctors I deal with and the pharmacists they send prescriptions to.”

So he, his client and the referral had coffee at the local hospital. The pharmacist’s advisor was with a brokerage firm that offered mutual funds, but he wanted to do more with his investments. Boyd explained that, as a discretionary money manager, he could help. “That was the piece that locked him in,” he says. Since then, Boyd has no qualms about asking for referrals. He also markets by visiting local pharmacies. “I’ll tell them, ‘We deal with a lot of your colleagues in the industry, and would love the opportunity to sit down and tell you what we do.’ ”

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If the pharmacist doesn’t respond, he won’t push. But, he’ll stop into her store the next month to buy something, like toothpaste. “You start to build a rapport—people realize that we understand their business, and some are very interested. Others have a great relationship with another advisor already, and to them we’ll just say, ‘Hey, we’re here to talk if you need a second opinion.’ ”

He estimates about one-quarter of all the prospects he approaches this way turn into clients.

Doctors vs. pharmacists

Just like doctors, pharmacists are busy, so Boyd often holds meetings off-hours. “It’s not uncommon to meet a pharmacist at a big-box retailer [where she runs the pharmacy] at 10 at night.”

Also, both types of clients are entrepreneurial. But what makes the two professions different is that pharmacists also own retail businesses. “They’re managing a workforce of X number of people on an ongoing basis,” he says.

And many pharmacists are in the process of expanding their operations. For instance, 18 months ago, a client approached Boyd with a business plan. “It was a great conceptual plan, which included getting ready for the aging population, offering flu shots and travel coaching—vaccinations and medical info for travellers.”

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But it lacked the financial information a bank would require. So Boyd and the client met with a commercial banker and drafted a plan that included cost estimates, including overhead and staffing. Once those details were added to the plan, the client was able to secure the funds and expand his business.

Also, pharmacists and doctors are both high-income earners. But he notes the latter category has bigger student loans to pay off first, meaning that advisors must help new doctors manage debt. One client, for instance, had several student loans. Boyd looked at the interest rates and how the loans were structured to determine payment and savings strategies. Consolidating the loans gave that client a lower interest rate. Then, Boyd created a cash flow and debt payment plan. “If he sticks to it, he should pay off his debt within four years.”

Client meetings

At initial meetings, Boyd ensures all decision-makers, including the client’s spouse, accountant and lawyer, are in attendance. “If we can’t get everyone in the room, then we’ll stop the process and say, ‘We’re not going to be able to give you what you need on a customized basis.’ ” He then suggests meeting when all parties are available.

These meetings take two hours. He sends a questionnaire ahead of time, asking the client about current investment and tax information.

The client will provide these documents and immediately ask where she stands. Boyd often counteracts that question, saying he needs to understand her retirement wishes first. For pharmacists, this includes if she’s going to sell her business, and if so, to whom.

“We get a lot of silence at that point, where one spouse looks at the other and says, ‘Hmm … We didn’t do this part of the questionnaire.’ ”

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Boyd then reassures them, explaining this is, in fact, the point of the meeting. So he’ll back up and ask about their retirement goals to help shape the plan. Questions include: “At what age would you like to retire” and “How do you see yourselves spending your time?”

For instance, a client who’d taken over his father’s pharmacy wanted to retire himself, so he could travel with his wife. Boyd helped the client consider his options—either sell to a big-box retailer or find a successor. The client had issues with the former because he didn’t want his clients “to get lost in the system.” So the client took Boyd’s advice to hire younger associates who could potentially take over the practice.

During this time, they determined he’d need $3 million to reach his retirement goals. His portfolio was a mix of conservative, dividend-paying equities and fixed income. The client was already near the $3-million mark, and the business sale would push him up to about $3.5 million in retirement income.

“When we knew his numbers were where they needed to be, he took the business proposal to his associates,” says Boyd. One of the associates expressed interest in buying the pharmacy, so his client sold. Now, the retiree enjoys travelling for weeks at a time.

Suzanne Yar Khan is a Toronto-based financial writer.