Fiscal Fitness

After a rocky start, Bill Howard has found success

Nobody ever said it was supposed to be easy, but nobody ever said it was going to go quite so bad, so fast. Just about everything that could go wrong had gone wrong in William Howard's planning practice. By 1994, not one, but both, of Howard's business partners had died, one of cancer, one of a heart attack. As if that weren't traumatic enough, the staff of his Memphis planning firm then started abandoning ship, handing in their resignations in order to go back to school, teach, or launch their own businesses. By the end of that fateful year, all seven of Howard's employees had hit the road.

At that point, your average person might have thrown up his hands and hit the road as well, leaving entrepreneurship to those with hardier souls and better karma. Howard decided he wasn't going to be average.

The morning after the death of his second partner, Andrew Wray, Howard called all of Wray's clients to reassure them that the firm would forge ahead. As the staff dwindled, he realized he'd actually been overstaffed. Each employee resignation ratcheted down his overhead and reduced his management responsibilities, which in turn reduced the pressure on Howard to bring in the bacon. He made the most of the situation, taking the opportunity to teach himself how to manage a single-owner firm, and taking his time selecting the members of his new staff.

One of the firm's saving graces was its structure, a legacy left to him in part by Wray. The two men had hammered out a number of systems that provided a framework for the business. Filing systems, personnel policies, job descriptions, how-to manuals for recurring tasks--all those things were in place by the time of Wray's death. The process a new client would go through had been formalized; the standard client form letters had been composed. The firm hadn't always been so organized-- "When we started out in 1985, we really didn't know what we were doing," says Howard with a laugh--but the newly disciplined approach made all the difference. "I'm very blessed that I was able to continue on with the business," says Howard, 45, in a soothing voice that reflects his Mississippi roots. "It's been successful, I think, because of the work that happened in the years before Andrew's death. We spent time away from clients and away from trying to get new clients, and were really focused on getting procedures in place and having a good discipline for the business."

The other saving grace was Howard's decision to direct his energies toward a specific clientele: doctors. Howard had targeted the physician market since his earliest days as a disability insurance salesman for John Hancock. His office had been right near a medical center in Memphis, and he figured that if he could get the residents and interns on board when they were young, he could build a client base of physicians to last throughout his career. There was only one problem. "When you're an insurance agent, your answer for every problem is an insurance policy," says Howard. "And there's only so much insurance a person needs." Frustrated by his inability to serve his clients' range of needs, he had turned to financial planning, becoming the third partner in a planning firm in 1985.

Suddenly a single practitioner 10 years later, Howard knew he had to work as efficiently as possible, targeting a niche market so that knowledge pertaining to one client could be used to benefit the rest. Doctors were the perfect answer. "Physicians have a lot of the same needs," says Howard. "That was good, because it allowed me to leverage my time."

William Howard & Co. Financial Advisors

William Howard

William Howard & Co.

Financial Advisors

6410 Poplar Avenue, Suite 330

Memphis, Tennessee 38119

901-761-5068

www.whcfa.com

Year practice began: 1983

Joined the firm: 1985

Number of planners/staff in office:

2 planners, 6 staff members, 1 intern

Number of clients of the firm: 125

Number of clients of his own: 100

Compensation method: Fee-only

Average fee for a comprehensive

financial plan: $3,500 and up

Fee for managing assets: Sliding scale from 1.5% of $500,000, 1% of $1 million, 0.8% of $2 million or more

Hourly rate: $150/hour

Client demographics: Physicians in the Memphis metropolitan area. Also business owners, widows, retirees, and corporate executives

Education: BA in insurance, University of Mississippi

Previous incarnations: Disability income insurance salesman

Professional designations: ChFC, CFP

Outside interests: Running marathons, lifting weights, spending time with family

Quotable quote: "When you've got a pain, you know you're sick, there's no doubting it, whereas you can be sick financially but not know it. Sometimes it takes a while for people to really realize they need you."

Prescription for Success

There was no magic formula for establishing himself as an expert on physicians' financial fitness, although the printed word did, and does, play an important role. "We were just very focused," he says of his marketing efforts, "and we did all of the things that unsuccessful people don't want to do." Howard wrote letters to reporters for medical trade publications as well as the local and national press, offering to serve as an expert source to be quoted in stories. When nobody called, he kept on sending them. "If they don't call you the first time you send them a letter, you don't quit sending them the letters or take them off your mailing list--you keep at it," he says. "Eventually, people call." And whenever a reporter would quote him in a story, he'd make copies of it and send it out to his entire mailing list of clients and prospects. Over the years, Howard was quoted in everything from the American Medical News and Ophthalmology Times to The Wall Street Journal and the Memphis Business Journal.

Howard got his name in print in other ways, such as by purchasing ads in the publications of medical membership associations. "We try to keep our name in front of our clients," he says, "whether it's through a medical publication or through a national publication they might read."

He also began getting bylines in strategic places, including American Medical News, Physician's Management, and the Memphis and Shelby County Medical Society newsletter. "I'd read an article back in the early 1990s that said that successful financial planners wrote articles, so I said, 'Okay, I'm going to find somebody to write an article for,'" he says. "I asked the medical society if I could write an article for them, and they said, 'We'll give you a chance. Let's see how you do with three.'" That was the good news, but it was also the bad news. "I'd never written before! It just wore me out, writing these articles!" says Howard, laughing. Still, he wrote one article a month for four years, then wrote one per quarter when the newsletter cut back its publication schedule. His next writing venture is to write a regular column for Physician's Money Digest, and he still writes every article that bears his name himself. "It would be nice to have someone write the articles for me, though," he says. "Believe me!"

Fortunately for Howard, writing the newsletter series had an unexpected perk. Several years after he began writing for the medical society, the society invited him to set up seminars for its members--effectively giving him several hours of uninterrupted, direct access to the very people he wanted to reach. Talk about target marketing. The firm still does seminars for physician groups, sometimes as a one-shot presentation, sometimes as a two-night series. Attendance ranges from 15 to 30, but Howard prefers the smaller groups. "It makes it easier for the physicians to ask questions and gives all of us a chance to get to know each other," he says. For a firm that relies heavily on referrals, getting to know each other is half the battle.

Curing Financial Ills

You might expect doctors who can cure the sick to brush off advice from a lowly financial planner, but Howard says he's found no such thing among his clients.

Why not? Part of it may be that by the time doctors get to his planning office, they've already decided that they need financial advice; if they thought they could do it themselves, they wouldn't show up. Part of it may be the humbling effect of the "trophy office space" Howard's firm occupies in the posh, gleaming 10-story Memphis office complex called International Place. But much of it, says Howard, is that the doctors simply realize that they don't have--or want to make--the time to learn how to handle their own financial planning. "They're busy working in their profession, which is very demanding. They're having to work more hours and see more patients for the same amount of money. Their time is precious, and they don't want to spend it practicing financial planning," says Howard. "If they had a broken arm, they wouldn't try to fix it themselves; they'd go to the orthopedist and let him fix it."

The difficulty with financial planning is that, unlike a broken arm, troubled financial health can fester unnoticed. "When you've got a pain, you know you're sick, there's no doubting it," says Howard, "whereas you can be sick

So Now What?

Dr. Howard's prescription for workaholics, like physicians, who fear retirement

Dr. X had been practicing medicine for more than 30 years when his financial planner pointed out that he could easily afford to retire. He cheered. No more early mornings, no more phone calls in the middle of the night. Perfect! And then it occurred to him: What would he do all day? Medicine had been his life. His wife worked. He had no hobbies. Suddenly retirement didn't look like quite so much fun.

For many people, retirement can be a two-edged sword; on the one hand a welcome respite, on the other, a loss of identity or purpose. Doctors can be particularly prone to the latter because they often identify themselves by their occupation, and work busy schedules that allow little room for developing hobbies. To go from busy 60-hour workweeks to a completely empty datebook can come as a shock.

"Some of our clients don't have any trouble, because they like to hunt, or play golf, or they can't wait to spend more time with their families," says Howard. "But I do have a client who could retire but has chosen not to. He doesn't know what he'd do if he stopped working."

Howard talks to his physician clients within five years of retirement about what they'll do after they stop seeing patients. Often he suggests that they ease into retirement instead of going cold turkey--choosing to not be "on call" at night anymore, or working three days a week instead of five. "And if we start talking about the future before they retire and they realize they don't have a lot of hobbies," he says, "maybe in the next few years they can develop some."

financially but not know it. Sometimes it takes a while for people to really realize they need you." While the firm once relied on articles and seminars to alert doctors to their need, word is now also spread by word of mouth. "I've had some young physicians referred to me by older physicians who told them, 'Look, I should have started working with this guy 20 years ago,'" he says. "That's great, because then you're not trying to convince someone they need you, they know they need you or they wouldn't have come in the door."

Surprisingly, one of the most common "illnesses" physician clients face relates to cash flow, their substantial incomes notwithstanding. "They've sacrificed, going to medical school, and now they want a vacation home, and they want this, and they want that," he says. "When they get out of school and get a good job, before they know it, they've got a big house payment, two car payments, and private school. All of a sudden, they don't have any discretionary money." Like a teenager who buys a car to get to a job and then can't quit the job because he has to pay for the car, the doctors come under pressure to work longer hours in order to afford their new toys. Howard tries to reach them before they get to that point, reining in their expenses and encouraging them to start any discretionary spending slowly.

After a while, clients get used to thinking before flashing their credit cards and pulling out their checkbooks. "Clients will call us and say, 'I'm thinking about getting a new house. Can I afford it?' 'We were just on vacation and we really liked this condo. Can we afford to buy it?'" says Howard. He admits that he's sometimes struck by his "Mother, may I?" position. "I'm thinking, 'My goodness, you make all this money and you're asking me if you can buy a vacation home?'" he says with a laugh. "But what it really is," he adds, "is that they're wanting to make sure it won't disrupt their long-term finances. Sometimes they just want someone who'll say, 'Well, let's just wait a bit before we do that.'"

A General Practitioner

Howard speaks "doctor-ese" when presenting financial concepts to his physician clients, particularly when explaining his role as financial planner. On page one of his client brochure, he writes, "Our position as generalist is perhaps best understood when made analogous to the physician who practices as a general practitioner. In this position, we are able to conduct a complete financial exam, provide a diagnosis of your present financial condition, and prescribe specific remedies leading to total financial health. Should your condition warrant a specialist outside our fields of practice or expertise, we can detect it and work with whatever specialist your situation requires."

The specialists to whom Howard refers clients include accountants, attorneys, insurance agents, and occasionally bankers. Howard tries to make things as easy as possible for the clients. He obtains authorization forms enabling him to verify clients' retirement plan and life insurance beneficiaries and insurance coverages, rather than asking clients to do it themselves. If visits to an attorney are necessary, Howard tells the client ahead of time what to expect and often accompanies the client to the office. "We've talked to them about who they want to name as executor, who they want to name as guardian, who they want to name as trustee, and given them the questions to think about before they meet with the attorney. It makes things easier," he says. Besides, the meetings are free educational seminars for Howard himself. "It's beneficial to us from a learning perspective," he says. "It's been a really great way for me over the years to learn about estate planning."

Howard's firm, which today includes one other planner and six staff members, offers financial services in several different formats. Comprehensive planning, as you'd expect, involves an in-depth analysis of the client's financial situation, and includes all meetings and communications over the next 12 months. Retainer clients pay an annual retainer for a financial plan that is updated every year. Consultations on an hourly basis are available to address one-time questions. And asset management clients pay for investment services based on a percentage of assets managed by Howard.

One-Issue Focus

One of the more unusual options that Howard offers is called "single-purpose planning," which Howard says grew out of the firm's discovery that "not everybody wants to have a comprehensive financial plan. They just want one specific issue addressed, but it's more than a one-time-meeting issue." For these clients, Howard collects much of the same information used in a comprehensive plan, but focuses his action plan on one or two issues such as investment planning or retirement planning. "Say a client has been referred to us by an attorney, their estate plan has been done, they've got $3 million, and they just want to know if they can retire comfortably on what they have," says Howard. "We're not going to enter into their estate planning, since that's been done. We would focus on the investment and retirement planning, since that's what the client is interested in." Like the comprehensive planning fee, the charge for this service covers all meetings and communications over the subsequent 12 months.

Since they often begin their careers hugely in debt yet often move on to impressive incomes, doctors face unique challenges that make them an intriguing demographic group to work with, says Howard. Perhaps because of his early days spent working with residents and interns, Howard is particularly pleased when he can catch young clients early and start them on the right track. "I've got a client that's coming in today who's a physician--I started working with him 11 years ago," he says. "He had a really high income, and he decided he could live on less than he earned. Over the years he's built up a portfolio of more than a million dollars. He had more earnings from his investments last year than he did from his salary, and he's only 36 years old." Just as good health habits learned early create benefits for a lifetime, so too can good habits of investing and saving. With luck, Howard hopes to write all of his clients a clean bill of financial health.

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