Smarter Money: Let Your Practice Dollars Work Better for You

As a small business owner in the aesthetic medical market, you are undoubtedly faced with crucial financial decisions every single day—some obvious and others tucked away and out of sight. There is great impact in everything you do: every new service you provide and every modality you invest in. So, when it comes down to maximizing your efforts, where do you look first to make sure you are getting the greatest ROI for your efforts?

Take time to examine the following areas that could have a positive effect on your bottom line.

Protection strategies have a lot of cost saving potential

When looking at the various insurance policies that your practice currently has in place, do you notice any areas of opportunity to recover costs? An often-overlooked space is malpractice insurance. It’s perfectly fine to acknowledge that medical malpractice insurance can be confusing, even for the most highly educated person. Because it can seem daunting to know where to begin looking for cost savings, many physicians simply do not. This is a huge mistake, because you can save by simply updating your coverage or changing your current carrier. Mr. Breslauer recalls a physician he worked for in the past who hadn’t taken a look at his malpractice policy for years, and with just a few quotes from competing carriers was able to save him thousands of dollars per year for similar coverage. You never know how much you will save until you take a few minutes to go through your current coverages, and carriers are always competing for the business of physicians with a healthy track record.

Mr. Breslauer advises that the same process can be applied to all insurance coverages, from Business Liability to Property and Casualty, and even Key Person Insurance, which is an often-overlooked strategy that can have a positive effect on your practice’s bottom line.

Re-examine your investing strategy

If you are currently working with a Financial Representative (hint: you should be), perhaps it’s time to revisit your current strategy. Mr. Steigerwalt specializes in working with physicians and suggests that many physicians will realize a great benefit by revisiting their investment strategies to include:

• Setting up a safety net,
• Diversifying their portfolio, and
• Focusing on preservation.

This isn’t as daunting as it might seem, and a discussion with a financial specialist who works with medical practices should be able to steer you in the right direction.

Set up a safety net. The ideal situation is that your business invests a fixed amount of cash (at least three to six months’ worth of your gross income) in a liquid account, such as a money market fund or even a savings account at a bank or credit union. You establish a cushion that can safeguard your business should your other investments or your business experience a period of underperformance.

Diversify your portfolio. Ask your financial professional to help create a portfolio that is out of your particular industry sector. Too many small companies invest in the same industry sector they are in. Investment diversification can go beyond industry—you should also avoid concentrating your portfolio on any one geographical region. By investing in securities outside of your region or even your country, you can avoid letting the economic troubles of one area ruin your entire portfolio.

Focus on preservation. Instead of limiting your portfolio to just your business, try to think of your business as simply one part of your overall investment portfolio. General best practice for small business investors is to base the structure of their portfolio on preservation rather than large-scale growth. By focusing on a more conservative investment strategy, you can have a better chance of being able to rely on your portfolio during an economic downturn. If you focus mainly on growth and a riskier investment strategy, both your portfolio and business are at risk when there is a dip in the market.

Offering financial wellness can improve the financial health of your practice

Are your employees experiencing financial stress? With money still an off-limit topic for many, the people who work for you may be suffering in silence, bringing unspoken financial stress to their jobs. A survey by the American Psychological Association in 2020 found that nearly two out of three adults say money is now a “significant source of stress.”¹ How can you help them? To answer this question, companies are increasingly offering financial wellness training to employees.

What is financial wellness? A financial wellness program is a workplace benefit where companies provide employees training and support for managing their financial lives. The support can come in a variety of forms. Some companies choose to help through in-person or online financial workshops. Alternatively, some companies facilitate one-on-one meetings between an employee and a financial representative. Financial wellness training is increasingly seen as a standard component of a competitive employee benefits package, with the percentage of employers offering financial wellness programs rising from only 20 percent in 2015 to more than 80 percent by 2018.² These programs address common money issues, such as helping people get a handle on debt. Financial wellness programs can also support employees in setting up financial safety nets through tools like income protection insurance. Mr. Engler observes that, in other cases, employees may want guidance in creating a savings plan or an investment strategy. Financial wellness programs can cover a range of issues and be tailored to an employee’s specific needs.

Financial wellness can boost your bottom line. Employees who worry about money are often distracted and less productive. In fact, one study found a financially stressed employee may spend up to three hours a week dealing with money issues. When someone is in this situation, they have a 7.5 percent decrease in productivity.³ Through financial wellness support, employers give people tools to help make sense of their financial lives and make a plan moving forward. As a result, workers feel less stressed and become more engaged on the job. Happier employees tend to stay on the job longer, reducing turnover rates and the expense of finding new talent.⁴

Any size business can offer a financial wellness program. A financial professional can help you survey the available options and show you how they can meet the specific needs of your employees. When people are worried about money, whether it’s debt today or a big purchase tomorrow, they carry that worry into the workplace. Financial wellness training can support your employees in managing the stress today as well as finding a path to greater clarity and confidence for the future. If you’re interested in bringing greater financial and emotional confidence to your employees, a financial professional can help you find the right program for you and your team.

This material is intended for general public use. By providing this content, Park Avenue Securities LLC is not undertaking to provide investment advice or a recommendation for any specific individual or situation, or to otherwise act in a fiduciary capacity. Please contact a financial representative for guidance and information that is specific to your individual situation. Neither Guardian nor its subsidiaries issue Malpractice or Property & Casulaty insurance.

*Guardian and its subsidiaries do not endorse or have any direct or indirect responsibility with respect to this activity. Michael Steigerwalt and Michael Engler are Registered Representatives and Michael Engler is a Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 1767 Sentry Parkway West, Suite 200, Blue Bell PA, 19422, 610-9358871. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representatives of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. WealthScope Finanical is not an affiliate or subsidiary of PAS or Guardian. 2021-130700 Exp 12/23

1. It’s a Scary Time Financially. How to Avoid Panic, CNBC, October 23, 2020

2. Benefits and Beyond: Employer Perspectives on Financial Wellness, Prudential, May 2018

3. Financial Wellness is Now a Requirement, Not a Perk, Entrepreneur, November 27, 2020

4. Happy Employees and Their Impact on Firm Performance, London School of Economics, July 15, 2019