Solutions for New Dentists’ Financial Planning Challenges

Up-and-coming dentists face different investment and insurance planning concerns from their more established peers. Each group needs to know that their advisors can provide expert financial planning consultations based on their existing situation and stage of practice. Insurance and Investment advisors share solutions for New Dentists’ financial planning challenges below.

Julie Berthiaume, an insurance advisor at CDSPI Advisory Services Inc., has spoken to many newly practising dentists who have experienced everything from calm decision-making to outright panic.

“One positive trend I’m seeing is the high degree of knowledge that dentists are bringing to the table,” she says. “They’re definitely informed and savvy — and their questions show this.”

Topping the list of new dentists’ inquiries is how much insurance they actually need. That, according to Berthiaume, is highly individualistic. “What are they doing once they leave school?” she asks. “Are they going to practise under another dentist? Continue their education elsewhere? Leave the country for a residency? Get married, start a family or buy a home? I always ask what their immediate plans are to provide them with the best advice,” she said.

Further, Berthiaume and investment planning advisors at CDSPI Advisory Services Inc., often hear some version of “I’ve read about this product and I’d like you to comment on it.”

“Over and above specific products, I can help a new dentist consider unfamiliar issues when it comes to insurance”, says Berthiaume. “For example, some newly practising dentists aren’t aware that there are two general types of disability insurance: one that’s designed to protect their personal income; and another — office overhead coverage — that is designed to help cover certain professional costs (such as office rent and utilities) during a disability”.

There can be resistance to spending money on something as intangible as ‘future possibilities’ but she’s prepared with real examples of when the right insurance made a difference. “I recount one incident where a young dentist was injured in a bike accident and lost his arm. His insurance allowed him the chance to train for another profession. Additionally, the 2013 disasters in Lac Megantic and Calgary affected several of our associate dentists and insurance helped by providing an income while they couldn’t access their workplaces, sometimes for many weeks. Hearing specific examples can be really eye-opening.”

As well, dental students may not be aware of the investment options and government rules that apply to them. For example, any TFSA contribution room that may be available to dental students is not lost from previous years, but rather carried forward to future years, potentially allowing  a deposit of more than the current annual maximum of $5,500/year. Also, with the Student Loan Interest Tax Credit, dental students can use the interest on government-issued student loans as a deduction on their taxes—but not the interest from private bank loans. This can affect decisions about whether or not a student should consolidate all of their outstanding debt with a bank.

Every student’s situation is different, usually with several options to choose from. With the tax advice from of an accountant, the investment planning advisors at CDSPI Advisory Services Inc. can strike a healthy balance between debt reduction and investing optimally. Certified Financial Planner® (CFP ®) professionals at CDSPI Advisory Services Inc. have the professional experience to help dental students or new dentists get over any initial learning curve.

Being a dentist means you have different opportunities, challenges and pitfalls unique to your profession — such as the right time to incorporate, prioritizing goals/objectives and developing a road map to achieve future financial success.

Send an email to grads@cdspiadvice.com or call 1-800-561-9401 for a personalized consultation with a CDSPI advisor.