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  • Partnership advice

    Recently I was offered partnership. It's a small practice (the owner and me) and possibly a 3rd person in the future. I get along great with the owner and want to move forward but I don't understand much about the finances of the practice. I contacted the Larson financial group and they gave me a quote for 3,000 a year for financial advice for me (more to get me started investing, which would be done by me, not them, I just want someone to keep an eye on things). They also would make a financial assessment of the practice and give me advice on how to structure the partnership. Reading on another physician financial blog, most of the MDs said that the Larson group was shady and it was too expensive. I would love to hear your opinions and suggestions. Thank you!

  • #2
    I wouldn't say shady. They're probably one of the least bad of the FA firms, BUT, that doesn't mean they don't do suspect things. For a lot of physicians they are probably great--keep an eye on things, access to decent funds (DFA), and encourage and can steer you into good disability policies. For someone who is motivated, the price you pay is to steep (particularly the AUM fees) in my opinion.

    Disclaimer: I fired my Larson advisor shortly after becoming an attending. I had ~ $260,000 of student loans and my person didn't know anything about refinancing student loans and got pushy on their version of a universal life policy, despite our multiple prior conversations about how all I wanted was term insurance. For a firm that "specializes" in physicians to not have a single idea about student loan refinancing (but then push universal life) was a huge red flag to me, so I got out. Haven't looked back. Maybe they'd be good for your situation, but I'd hate tiger locked into a yearly arrangement with them just for that.

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    • #3
      I think shady is probably not the right term. Full service for some people who don't want or need full-service. That would be accurate. A little too excited about the idea of a VUL for a retirement account. That would be accurate (particularly for a time period prior to 2-3 years ago.) But I wouldn't call the firm shady. Are they the cheapest firm I know of for either financial planning or asset management? No. Are most of their clients better off with them than without them? Almost surely. Are they the right firm for you? Only you can decide. But I can tell you this. Most of their clients don't regularly read this blog nor participate on this forum. They generally don't want to deal with this stuff and are willing to pay the price to have someone else do it.

      Oh. And $3000 a year is a steal. If you think that's expensive for financial advice, you need to learn to do it yourself. Personally, I think any price that is a four figure amount is in the reasonable range.
      Helping those who wear the white coat get a fair shake on Wall Street since 2011

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      • #4
        So, Do you think they would be appropriate to go through the practice's finances? If not, do you have any recommendations? For my personal finances I am doing some things on my own and currently reading a lot about investing (reading on this website a lot!) I just really need somebody who can go through the practice's numbers and walk me through them. If I go with Larson, I would probably hire them for a year only

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        • #5




          So, Do you think they would be appropriate to go through the practice’s finances? If not, do you have any recommendations? For my personal finances I am doing some things on my own and currently reading a lot about investing (reading on this website a lot!) I just really need somebody who can go through the practice’s numbers and walk me through them. If I go with Larson, I would probably hire them for a year only
          Click to expand...


          I know at least the principals offer that service. I don't know that every single one of their advisors has experience doing that. It's a large organization.
          Helping those who wear the white coat get a fair shake on Wall Street since 2011

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          • #6
            Update to above post regarding my partnership:

            I contacted Larson and spoke to Colin Wiens and Jacob Fisher. We discussed two main topics: My personal finances and partnership. From the personal finances standpoint, they reviewed my different policies, made helpful suggestions and I was able to get a better deal on term life insurance. They compared different quotes for disability insurance and they agreed that my existing policy is a better deal (its not through them). We discussed investing but I was clear from the beginning that this is something that I wanted to do on my own and they were respectful of that.

            For the partnership, I had concerns because I work in a small practice and I was pretty clueless about the finances. They have gone above and beyond. They first contacted the office manager and went through my productivity and numbers for the past five years. They compared my performance and compensation to the national average for my specialty and presented everything in tables that I was able to use to negotiate a base salary increase (which I was granted). The owner of the practice has never had a partner so there was no real structure to the partnership. Colin discussed with me different partnership models. They went through all of the practices finances, digested all the info and gave me a detailed report on profits and everything else. They went back and forth for months with the office accountant discussing different terms of the partnership. They are helping with the contract. In summary, they have been amazing. I would have never been able to go through the numbers of the practice and partnership stuff on my own, and they have provided peace of mind. I am still getting a lawyer to look over the contract of course, but the financial part is taken care of. For my specific needs, Larson has been wonderful and extremely helpful.

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            • #7
              What was the total fee?

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              • #8
                Awesome, thanks for the update.

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                • #9
                  3000K

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                  • #10




                    3000K
                    Click to expand...


                    A steal! I would have paid 4M!

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                    • #11
                      did they value the practice and was there a buy-in?  are you 50/50 split in the shares of the practice?   what is your compensation formula and how do you split expenses if you don't mind me asking?   also going through partnership talks with a solo person and interested in the different models/formulas out there, especially since yours was a solo owner

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                      • #12
                        @sheilayvette,  Congratulations on moving forward with your business practice.  Consider this  wide view of partnership.  You have purchased into a practice at $ XX.  In several decades, you will exit this business, most likely via retirement.  Ideally you will have added value to it, and be paid out $ XX + XX.  What can you do during the next decades to add value?   Can you effect the payer mix? lower overhead?  add patients?

                        In contrast, I'm aware of a partnership dissolving now, with the newest partner having little to no payout.  He paid into the A/R in 2008.   The practice succumbed to deterioration of payer mix, and he added no value by his practice habits and limited work load. He paid in lots and will leave with little.

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                        • #13
                          Yes, they calculated the value of the practice and its not going to be 50/50 since the owner sees a larger volume than I do. We are still working out the details of the formula and such . We are still figuring out how to split the expenses since she does some procedures that I dont do like Botox and EMG

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                          • #14
                            Jz thank you for your wise words. I am very aware of this, and I havent signed anything yet! I was able to get a substantial increase in my salary, but we are still working out details. Very good points

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                            • #15
                              thanks for the update - would like to know the final details regarding compensation formula and how you're splitting expenses once the details get worked out so I can have reference point for my talks.   He is thinking right now of splitting expenses based on % of income generated, but I think it would be better to have some 50/50 splits on fixed expenses like rent etc.

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