Doctors, hospitals and caregivers in some parts of the country are scrambling to free up resources to deal with what may be a deluge of patients struggling with COVID-19. In some parts of the country, like New York City, hospitals are filling up and emergency facilities opened. Studying the gruesome outbreak in Italy, the American College of Surgeons (ACS) and the U.S. Surgeon General issued guidance in March for hospitals to minimize, postpone or cancel elective surgeries indefinitely.
A necessary step, but advisors with practices that focus on medical professionals say their clients are being impacted by the coronavirus pandemic in unique ways, divided into two camps at the far ends of the spectrum. Those on the front lines of the crisis are dealing with long hours and risking their own health, and that is top of mind. Doctors who aren’t immediately dealing with the crisis have seen a dramatic reduction in income as the nation locks down and puts off nonessential medical appointments.
"A few weeks off is a major impact on physicians who are paid for the time they put in," said advisor Steven Podnos, a part-time pulmonary and critical care physician for the Air Force Reserve in central Florida who changed careers to start his advisory firm, Wealth Care, with an emphasis on the financial planning needs of physicians and dentists.
"I've never seen a time where there were regulatory constraints on patients, and also where patients don't want to come in because they fear being infected by other patients," said Podnos.
"They can ignore the market, but they can't ignore not being paid for three months," said Jennifer DeLorbe Quire, a financial planner at Wrenne Financial Planning in Lexington, Ky., who serves mostly physicians in their mid-30s.
Medical doctors are compensated in a variety of ways, but those in private practice largely charge patients per visit or treatment. Salaried doctors are also feeling the pinch if they are not bringing income to a hospital or health care employer.
James Dahle, the founder of The White Coat Investor, a website that helps doctors navigate Wall Street, said it’s a balancing act between advising clients to be more conservative during a time of professional stress, while their clients are seeing market opportunities in the steep dips in stock valuations. He recently advised a laid-off physician to not make any moves into equities despite the opportunities.
"It's not time to invest. He's got to hang on to cash," said Dahle, who also works in emergency medicine in Salt Lake City.
Other health care professionals are taking a hit. The CDC has recommended that dentists postpone elective procedures and mainly leave their practice open only to clients in need of urgent care.
"They've basically had their clinic closed, so they're out of work," Dahle said. "Usually, doctors in a recession have a stable income, so they can afford to take investment risk, but that's not the case this time.”
Advisor Keith Beverly, a managing partner at GRID 202 Partners, an RIA in Washington, D.C., says his clients are considering raising allocations to fixed income investments. A particular client's 403(b) is locked in at a 3% yield, which looks more appealing to Beverly as the 10-year Treasury hunkers down to record lows.
Another client is a specialized physician who lost a few months of his income to canceled and postponed procedures. Beverly wants to reposition the investment strategy to be less aggressive.
"You don't want to deal with your income being lower as well as your investment portfolio," said Beverly.
Quire said her firm is informing clients of the most relevant government proposals. The federal government temporarily suspended interest on federal student loans for 60 days. She said some clients could take advantage of putting their loans in forbearance for two months. The firm is also keeping abreast of mortgage announcements.
"Most mortgage services are working on some sort of relief program for those borrowers who have had some sort of loss in income," Quire said. For instance, Bank of America is offering customers—depending on their financial situation—an opportunity to defer their mortgage payments.
If nothing else, talking about money and markets may be the right diversion for physicians, said Dahle. Physicians and other medical professionals are dealing with the coronavirus all day, and nearly every day, so he says advisors should "just provide a distraction for them in these difficult times."
"In fact, I think it's a good time to deal with some of the stuff that people put off, and maybe they'll be a little more willing to address them. I'm thinking life insurance, estate planning," Dahle said. "You'd be doing them a service to get their life insurance taken care of since this a dangerous time for them."
"It's important to reach out to your clients and acknowledge their fears—empathize with them," said Quire.