It might be hard to believe but there are financial advisers that specialise in only advising dentists and that’s what we do! We genuinely believe it’s crucial your advisers have a full understanding of how finances relate to dentists, from borrowing money to buying a house or a practice to gearing up for retirement. The MocoMoney advisers have all been working with dentists for many years.
As a result of having a very select group of clients we can afford to invest the time to learn everything there is to know about NHS pensions, and, for example to understand the effects of incorporation for dentists on areas such as their pension and income protection, as well as tax.
However if we were dealing with doctors, vets, pharmacists and every other profession it would be very likely that we could end up being a jack of all trades and master of none.
Having worked with hundreds of dentists over the years we have a huge number of contacts across the professions from Solicitors, Accountants, Banks, Leasing Companies, Marketing agencies and Valuers.
We’re also members of ASPD, Association of Specialist Providers to Dentists, which demonstrates our commitment to working with dentists and provides a forum for the members to share information and constantly improve our understanding of what’s happening in dentistry. This also means that, where relevant, we can refer to trusted other professionals and help our dental clients in all areas of their practice.
Your advisers need a full understanding of the NHS pension such as: the effects of incorporation on your pension; whether you should consider taking your pension earlier than age 60; and how much (if any) pension you should convert to a tax free lump sum. If you’re in danger of breaching the life time allowance pension limit they can help minimise the effect on your individual tax liability.
Another example is that incorporation for a dentist can also have serious financial implications with income protection claims, income tax issues and future borrowing requirements.
Perhaps one of the most important areas for dentists is to check their insurances have been set up correctly. It still amazes us how many dentists find they do not have “own occupation” on their Income Protection or Critical Illness plans. This could in certain circumstances result in a claim being rejected by an insurer.
We know which lenders to use for VDPs, associates, associates without three years trading accounts, incorporated dentists and those approaching retirement.
Please remember that your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. Written details on request.
Preparing the business plan
1. We organise and prepare a structured proposal to the banks to ensure the banks minimum credit requirements are met and the lending is agreed. In this present financial climate, it’s crucial the initial presentation to the banks satisfy their criteria.
2. We help put together cashflow forecasts and give guidance on business plans.
3. We have formed and maintain close relationships with the Development Managers of the main banks & financiers lending to dentists. Applying through the right people can make the difference.
4. We check affordability & confirm if the banks will lend before you make an offer on a practice.
5. We provide an unbiased opinion on the best finance available and will recommend the best deal.
6. We can calculate a true comparison of all the costs, including interest costs, arrangement, security and valuation fees.
7. We can help you negotiate on the purchase price of your practice, so if it’s your first purchase we can point out the pitfalls and help prevent you paying more than necessary.
8. We advise on the rate and all the associated fees, and also on which lender is offering good service. So if you want a quick completion for a purchase we’d recommend a lender that’s super fast and can get an offer out within days rather than weeks.
9. We have direct access to lenders’ underwriters who have a pre-agreed lending policy for dental clients – particularly for VDPs and young associates without accounts.
10. We have years of experience of helping dentists get practice finance in place and can help clients to avoid making expensive mistakes by getting it right the first time.
1. We have a team of administrators that will regularly contact the solicitors, accountants, valuers on your behalf reducing the amount of time you have to pick up the phone yourself.
2. We don’t just help you present the proposal to the banks we ensure surveyor, accountant, lender & solicitors all talk to each other so exchange and completion are as painless as it should be.
3. We provide independent advice on the type, term and amount of insurance required
4. We can help arrange practice expenses cover at competitive rates.
1. We work with specialist accountants, solicitors, valuers and other experts to help you build the practice and make it profitable.
2. We offer a refinancing comparison to see if you should stay with your lender. This includes a review of all the costs such as interest, arrangement, security and valuation fees.
3. For engaged clients we offer unlimited telephone, email and face-to-face meetings.
4. Our advice is covered under our Professional Indemnity Insurance so you have double protection.
5. Essential Money Limited is an Independent Financial Adviser company giving you have access to whole of market independent financial advice on mortgage protection, savings plans, pensions, and pretty much anything else to do with money.
The world of financial services has changed and understanding the finer details to suit dentists requirements can result in £1,000’s of savings to dentists or could cost tens of thousands of pounds if mistakes are made.
Based on NASDALs latest annual report the average dentist associate’s Net Profits are £72,988 which based on a typical working week works out at £50 per hour.
Your time is valuable, so why would you waste it doing something that adds no value and in fact detracts value from your net worth; like managing your own money?
Let’s pretend you had an equity portfolio of £100,000 which you manage yourself. Let’s also assume your portfolio outperforms a comparable index by 2% a year, every year.
In the first year the market rises 10% and your portfolio rises 12% so you have added an additional £2,000 to your net worth.
If you devoted an hour a week to the tasks over a year, that means you made £40 an hour for each hour devoted to your portfolio, which is about £10 per hour less than you make as a dentist.
Implicit in these assumptions are three crucial factors.
You always beat the market
You do it on a net basis after dealing costs
Your return is achieved at no higher risk than a tracker fund.
If you only achieve 1% more than the market, the one hour a week drops to a net value of only £20 per hour.
More worrying is the risk incurred. Higher returns, especially from smaller portfolios, are usually generated by taking more risk. In a down year that means your losses are likely to be worse than a tracker fund, and your hourly rate is likely to be negative.
Even with the use of the internet and automatic dealing, an hour a week is not much time to research stocks, place the trades and update your records.
An even bigger assumption is that an hour a week, or even two, is all that is needed to beat the market. Most professional managers work considerably more than the normal working week of 40 hours, and only half of those manage to beat the index in any one year and a lot less over multiple years.
Another issue is that it’s arguably not the best idea to hold all your assets in one asset class, UK equities.
A portfolio of that size should at least have international exposure and some fixed income. As a DIY investor, would you be able to manage those securities as well in your allotted hour or two a week?
On these numbers it looks as if most dentists have probably got better uses of their time than spending it hunched over their PC for a few hours a week!
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