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Professional News Articles : : ON PRACTICE MANAGEMENT by Janyce Hamilton : Gear up for financial planning now so tax time is better next year

Gear up for financial planning now so tax time is better next year

April 20, 2007

This month, I interviewed a financial advisor from Brookfield who flies “under the radar” of the big speakers at the dental meetings. She deals not only with dentists, but physicians, chiropractors, you name it. Her approach to managing a client's money is refreshing and sincere. This is a humble grandma, one who started in 1975 with a sole investment client giving her $1,000. Today—37 years later—she has 1,675 clients entrusting her with a total of $170 million to manage.

Too busy to do anything but manage client accounts? Nope. Over the years, she manages to volunteer and sponsor mental health groups, Special Olympics, food pantries, you name it. And she's not some little “CPA broad” either. This is West Suburban Chamber of Commerce's Woman of the Millennium. She holds licenses in real estate brokerage, most every type of insurance, securities and is an IRS enrolled agent since 1980. (But, she'll tell you how not to get audited by being honest and keeping the best kind of records.)

Has all this achievement gone to her head? Nope. She's still working harder than ever in a modest office space, and rumor has it that she gets joy in doing some incredible “secret Santa type” deals that I'm not supposed to mention. But as an employer, have you ever given your long-time employees without the means a dream come true an all-expense paid trip? Another big gift?

Read on to hear the advice of Linda Sokol Francis, president of Brookfield Financial Plans, and a resident of Western Springs.

The Interview

Janyce Hamilton (JH): What are some of your titles?

Linda Sokol Francis (LSF): Accountant, real estate broker, income tax preparer, insurance broker, director of the Brookfield/Riverside Rotary, enrolled agent for the IRS, registered representative of Waddell & Reed and CSA.

I started doing taxes when I was 17 years old. This is always what I wanted to do. I got the rest of my licenses in 1975.

JH: Does your family work with you?

LSF:  My daughter, Nancy Lisowski, is also a registered representative with Waddell & Reed and a tax preparer in my office. Many of my staff of 10 have been with me for over 30 years! We travel together and we socialize together all the time.

JH: Why should a dentist trust you can handle his or her financial planning situation?

LSF: Besides dentists, my clients are chiropractors, physicians, ophthalmologists, veterinarians, sport therapists, masseuses, funeral directors and more.

All of them bring in last-minute tax paperwork that's a mess, like anyone else.

JH: Have you noticed any changes in tax style and codes over the decades for dentists and other doctors?

LSF:  Many changes have affected them. One is employee versus subcontractor.

JH: Have you ever had dentists do their own complex tax return preparation and get into a mess that you had to straighten out?

LSF: Many professionals think that they can use software like TurboTax and be guaranteed to do it correctly. But like anything else—G.I.G.O.: Garbage In, Garbage Out. You must know all the tax codes to correctly do the return or your input will be incorrect. We spend much of our time getting refunds by amending returns for people who thought they did it correctly!

JH:  For the dentist who has a feeling he's not claiming everything he should for tax purposes, and is too passive about retirement, life insurance planning, and the like because his brother-in-law does his return and he doesn't have a Linda Sokol Francis, can you list 10 suggestions for what this dentist needs to do this year?

LSF:

1. Get an advisor that you can trust—not out of the Yellow Pages! Find someone who is respected in the community, not just someone sitting in a fancy rented office who may be gone tomorrow.
2. Make a list of all your assets: Costs and purchase dates of stocks and bonds; expiration dates and rates of returns of all; purchase dates of annuities and rates; cost of real estate and purchase dates; cost of equipment and purchase dates, etc.
3. Buy-sell agreement. Do you want your partner's spouse or attorney to be your new business partner? Do you want your 10-year-old child running your business if you become disabled?
4. Fund your buy-sell agreement.
5. Get disability insurance.
6. List your monthly expenses, including interest rates, if debts are included.
7. Make a list of goals—in prioritized order.
8. Keep all receipts, no matter how little.
9. Make sure your spouse or heirs are aware of your wishes if you become disabled or deceased.
10. Call me.

JH:  If a dentist did call you for a full consultation, what are the things you'd ask her or him to bring with to analyze the financial health of their business and their personal life?

LSF: All of the above and financial records and copies of tax returns.

JH:  How long would this meeting last and would a dentist take notes?

LSF: The first meeting is half an hour, just to become familiar with your advisor and to drop off all the information for your advisor to analyze. The second appointment would be a discussion of the analyzation. This would take longer.

JH: How much does a meeting like this take, and can you guarantee the dentist would learn things financially lucrative that he or she doesn't already know or isn't already doing?

LSF: The first meeting is free. After that it is either an hourly charge or commission-based, whichever the client prefers. There are no guarantees in this world, but it would be impossible to come away empty handed.

JH:  Do you have to work or are you retired but love it too much to slow down?

LSF: You cannot slow down in this business. I have $170 million under management. I don't have to work. I love what I do and my best friends are my employees. Who else can say they see their best friends every day?

JH:  Dentists, too, want to be able to retire one day and work part-time because they love it, not because they have to. It is a physically demanding job, and their spines and feet take a beating. Are there disability issues that a sole proprietor like a dentist need to have in place in the event she/he can no longer work?

LSF: Get that buy-sell agreement and disability insurance.

JH:  Obviously, dentists are not megamillion lottery winners, but they do have income that some are spending on luxury cars and homes and trips more so than financial security plans. Do you have clients such as dentists who need to slowly roll-out changes and plans in various areas of their life? Do you consult with them monthly until life, health, retirement, disability, investments, trusts and tax plans and programs are optimized? Do you teach them how to watch their own investment health or do you call them to report on big changes in their account?

LSF: I am in close contact with my clients regularly. I am their financial conscience.

JH:  Dentists always want their next April 15 to turn out a little better than the previous one, but ideally to feel a little better all year round. Who wouldn't relish the feeling of being responsible in getting information so they can make decisions based on wise advisors, and relax when they think of their financial status in the distant future?

LSF: Call me! Start tax and financial planning now.

Janyce Hamilton is a Chicagoland freelance dental writer and editor. Send suggestions for topics to be covered, or any comments on this column, to review@cds.org.

Copyright 2007, Chicago Dental Society