Morningstar Advisor - August/September 2012 - (Page 12)

Advisor Profile Live a Balanced Life By Kate Stalter Interested in their total well-being, Dr. Carolyn McClanahan strives to give clients more than financial advice. Medicine is one of the “helping professions.” Physician-turned-advisor Carolyn McClanahan also puts financial planning in that category. When McClanahan formed her Jacksonville, Fla.-based fee-only firm, Life Planning Partners, in 2004, her goal was to provide the kind of services she and her husband sought when they approached planners as professionals. “We did our own investing in the 1990s, and like everybody else, we thought we were brilliant,” she jokes. The couple did well enough that McClanahan’s husband considered quitting his engineering job to pursue lower-paying interests, such as photography. But when they discussed their desire to reduce their income with advisors, they got little help. Instead, advisors seemed more intent on selling them products and collecting commissions. “When we interviewed these people, it was all about taking over our investments or selling us high-fee mutual funds,” she says. “It never really was about the planning. It was all about taking over our portfolio and never really answering the question of whether we would be OK if my husband didn’t go back to being an engineer.” Catching the Bug having a career change in mind, she began taking classes in the Certified Financial Planner program at the University of North Florida. “I just fell in love with it. I saw a huge need and realized that people need advice. So, I changed careers,” she says. Her ambitions were modest. She expected to do planning and manage money for a few of her doctor friends and have about $20 million to $30 million in assets under management. But she soon joined the National Association of Personal Financial Advisors, and referrals began coming in. The practice took off. The majority of her clients are still physicians, but that’s not the only group she markets to. McClanahan emphasizes the planning aspects of her practice. Her professional background gives her special expertise in areas such as end-of-life needs, long-term care, and chronic illness issues. She took it upon herself to read the entire Health Care Reform Act to better inform clients, as well as other advisors, about its contents. “When I entered financial planning, I realized there were a number of things I know from medicine that would help financial planners if they understood it,” she says. She sees plenty of room for improvement when it comes to insurance planning, for example. She says that many clients pay higher insurance rates than necessary or, in some cases, can’t get insurance at all because they don’t understand what is in their medical records. To address that problem, McClanahan speaks to groups of planners, offering ideas to improve client insurability and how to help get clients lower rates. She also speaks to advisors about other health-related planning issues. Client “Triage” Before the firm begins an investment plan for a new client, he or she must understand that comprehensive planning is the basis for everything that follows. “We won’t take a client who only wants to do piecemeal stuff,” McClanahan says. At the initial meeting, there is typically no discussion of investment strategy or even the client’s finances. “We talk about their goals and dreams, what brought them to us, and what they’re looking for in a financial planner and investment advisor.” The firm’s client engagement standards are on its website, and McClanahan insists that potential clients read them carefully and sign off on them. This document lays out the obligations of both the firm and the client, explains the firm’s services, and outlines the type of working relationship that clients should expect. After that experience, McClanahan wanted to learn more about financial planning. Without 12 Morningstar Advisor August/September 2012

Table of Contents for the Digital Edition of Morningstar Advisor - August/September 2012

Morningstar Advisor - August/September 2012
Letter From the Editor
How Much of the Behavior Gap Is Your Fault?
What’s Your View of the Muni-Bond Market?
A Balanced Life
How to Get to Know EMMA
A Strong, Robust Fund Business
Dividend Investing Abroad
Four Picks for the Present
Investment Briefs
Fund Expenses Through the Decades
Autos on Comeback Track
Lessons From the Muni-Bond Rebound
Municipal-Bond Landscape Shifts
Municipal Bonds 101
A Tale of Two Cities
Unraveling the Mysteries of Money
Small Companies Mean the World to Him
The Chinese Art Market and the Origin of Bubbles
The Myth of the Dumb Investor
Stocks That Can Stand the Heat
Our Favorite Mutual Funds
50 Most Popular ETFs
Undervalued Stocks With Wide Moats
The War on Savers

Morningstar Advisor - August/September 2012