Financial Planning for Dentists

Dentists have unique financial planning needs. Financial advisors specializing in serving dentists help them make smarter money moves to achieve their goals and enjoy a comfortable retirement.

While dentists, on average, rank among the highest-earning occupations in the United States, expenses can often take a considerable bite out of the total compensation they take home.

According to the Bureau of Labor Statistics, the median annual pay for dentists in 2021 was $163,220. But from these earnings, dentists often have sizable student loan debt to repay and costly insurance policies to maintain. And many dentists also own and operate their own practice, which comes with the overhead and expenses of renting office space, purchasing supplies, and staffing costs.

A financial advisor specializing in serving dentists understands their unique financial planning challenges and can recommend effective strategies to help dentists overcome obstacles and achieve their goals throughout their careers and into their retirement years.

You’ll likely find dozens of nearby financial advisors well-suited to help you reach your money goals with a personalized plan. But it may be more difficult to find a local financial advisor who specializes in serving dentists.

Fortunately, many financial advisors offer virtual services so you can meet online no matter where you (or they) live. This means you can choose to hire a specialist financial advisor who lives hundreds of miles away if you decide their knowledge and experience working with dentists is a better fit to help with your unique financial planning needs.

Financial Planning for Dentists

💡 We sat down with financial advisors who specialize in serving dentists to ask what advice they would share with dentists seeking professional guidance and oversight of their investments and important money matters. Scroll down to view the Q&As and see what we learned.

Get to Know: ✅ Cecil Staton | ✅ Kevan Melchiorre

🙋‍♀️ Do you have questions not answered below? Use the form on this page to submit your questions, and we’ll update this article with answers from the financial professionals and educators in the Wealthtender community. You can also contact the financial advisors featured in this article directly to set up an introductory call or ask your questions by email.

Q&A: Financial Advisors Specializing in Dentists

Four Questions with Cecil Staton, CFP®, CSLP®

We asked Athens, Georgia-based financial advisor Cecil Staton to answer a few questions about financial planning for dentists based on his specialized knowledge and experience.

Q: How do the financial planning services you offer dentists distinguish your firm from other advisory firms?

Cecil: Our service model enables dentists to maximize life beyond the chair and achieve financial independence. Arch Financial Planning is a financial planner for dentists and understands the unique challenges of needing a drill in hand to earn an income. Managing your time as a practice owner, practitioner, and personal life is where our financial advice shines. We provide all services under the fiduciary duty, meaning all financial strategies must be recommended in your best interest.

For associate dentists, I help them review their compensation packages to ensure the percentage of collections they receive is competitive. Next, I help them structure their student loans & repayment strategy appropriate for other goals such as starting a dental practice, growing their dental practice, and purchasing their dream home. 

As you transition from an associate dentist to a practice owner, I guide you through the unique challenges of becoming a business owner. I coordinate your business entity’s clinical income structure, corporate entity structure, and benchmarking management of overhead expenses.

Q: What is a common financial planning challenge unique to dentists that you frequently encounter when working with your clients? How do you work with them to overcome this challenge?

Cecil: At Arch Financial Planning, we understand the financial challenges regularly faced by dental professionals. One common issue we encounter is dentists experiencing burnout or fatigue. That’s why we specialize in creating personalized retirement plans for dental business owners, helping them to make work optional and achieve their financial goals.

We work closely with our clients to increase their top-line revenue, allowing them to earn more while enjoying a comfortable retirement. Our experience and expertise in dental personal finance mean we understand dental professionals’ unique retirement planning challenges and can offer tailored solutions to overcome them. Our advisory services help you secure your financial future and get the most out of your dental practice. 

Get to Know Cecil Staton, Financial Advisor for Dentists:

View Cecil’s profile page on Wealthtender or visit his website to learn more.

Q: For dentists who are unsure whether or not they should hire a financial advisor at the current point in their lives, what guidance can you provide to help them make a more informed and educated decision?

Cecil: Your highest and best use of your time is with your drill in hand, not researching student loan repayment strategies or how to start and maintain your practice. Arch Financial Planning, LLC enables you to regain the time you’d spend worrying about these things and feel confident in your decisions.

Not all advisors are created equal. Many are generalists and don’t specialize in the unique challenges dentists face. Your advisor must hold certifications such as the Certified Financial Planner (CFP) and Certified Student Loan Professional (CSLP). If not, they may be missing the core competencies needed to serve you. Lastly, they should specialize in dentists and other medical professionals within their financial planning practice.

If you’re considering hiring an advisor and they ask about your revenue rather than your collections, that should be a big red flag. Your financial advisor should understand your profession and speak its language.

Q: Is there anything that comes up frequently in your initial meeting with dentists that surprises you?

Cecil: As a young dentist, one of the questions that commonly arises is whether or not to wait until student loans are paid off before purchasing a practice. Although it seems like the responsible option, prioritizing debt repayment over practice ownership can hinder financial success. After dental school, selecting an income-driven repayment plan for your student loans is usually best.
 
By becoming a dental practice owner, income often increases significantly, easing the burden of repaying student loans and filling other financial needs, such as retirement savings. As a result, dental professionals should carefully consider their financial situations before deciding whether to delay purchasing a practice.

After several years of experience as a dentist, you’ve typically hit the right time to become a practice owner. Small businesses, such as dental practices, require a unique skill set from their financial planner and tax professional.

Q: Is there a particularly memorable experience or a moment you recall with a dentist client when you first decided you wanted to specialize in this area to address their unique financial planning needs?

Cecil: The most rewarding part of my service model is helping dentists gain confidence in their financial plans. For many, this means they’re confident about starting, growing, or expanding their practice.

The most memorable experience I have is seeing the transformation of an associate dentist I started working with a few years ago. This associate dentist worked for a practice owner that kept dragging their feet when the conversations about equity ownership took place. The associate earned a high income by making over 30% of their consistent $1,000,000+ collections yearly.

Even with this high income, the associate dentist wasn’t confident in their career trajectory. I helped guide them through starting multiple practice locations and feeling optimistic about their career and life goals. The associate is now a practice owner and credits our relationship with the confidence to pursue this dream.

Q: What Services does Arch Financial Planning provide for Dentists?

Cecil: Arch Financial Planning is a registered investment advisor that serves dentists nationwide. As your wealth advisor, we offer dental-focused financial planning and investment advice. We can help identify an accounting firm or attorney for legal advice that specializes in dentists.

Our comprehensive financial services include advice on the following:

• Practice Transitions
• Debt Management
• Investment Strategies
• Investment Plan
• Insurance Products
• Cash Flow
• Tax Advice & Planning
• Tax Return Review
• Estate Planning
• Dental Career
• Financial Freedom
• Credit Cards
• Mutual Funds vs. ETFs

Five Questions with Kevan Melchiorre, CFP®

We asked Champaign, Illinois-based financial advisor Kevan Melchiorre, to answer a few questions about financial planning for dentists based on his knowledge and experience.

Q: For dentists who are unsure whether or not they should hire a financial advisor at the current point in their lives, what guidance can you provide to help them make a more informed and educated decision? 

At Tenet Wealth Partners, we understand that the idea of working with a financial advisor can seem uncomfortable.  Just like some patients may be nervous about going to the dentist for a procedure or other reasons, spilling all of the details of your financial life to an advisor may not seem desirable, either!  You may also be wary of the cost of working with an advisor or the cost of products that an advisor may recommend.  All of these thoughts may make you feel like you should just do it yourself and avoid working with someone altogether.

This is why we feel that it is so important to work with a fiduciary financial advisor, particularly a CERTIFIED FINANCIAL PLANNER™ professional, who fully understands your unique needs and ideally specializes in working with dentists and dental practice owners.  Dentists’ schedules can be extremely hectic and jam-packed, leaving little time to focus on financial management (not to mention balancing the work-life equation in general).  Therefore, having a dedicated financial partner can help give you back more time, confidence, convenience, and peace of mind.  A fiduciary advisor will also put your best interests first and, above all else, focus on your needs, goals, and values to craft a personalized financial plan.  At Tenet, our three partners have over 40 years of combined experience, and all three of us are proudly CFP® professionals. 

If you have concerns or hesitations about the cost of hiring a financial advisor, it is crucial to not only have full transparency around how an advisor is compensated but also to ensure that you will receive immense value and an incredible experience for the cost.  At Tenet, we are big believers in maximizing value for cost, meaning that an advisor should deliver the highest level of service and solutions to clients for what they pay.  In fact, we have created a unique, value-driven approach to planning called Household Alpha, where we harness the power of advanced financial planning techniques with the goal of providing measurable value beyond investment returns.  We do this by focusing on three key areas: (1) Tax Minimization, (2) Cost Savings, and (3) Risk Mitigation, all of which we believe relate to concerns and challenges that dentists and dental practice owners face.

Q: How do the services you offer to dentists distinguish your firm from other advisory firms? 

At Tenet Wealth Partners, our team has created a unique and dedicated approach to partnering with dentists and dental practice owners.  With a deep understanding of the unique needs and challenges of dentists, our financial planning approach for dentists is comprehensive yet places a high emphasis on certain aspects, such as asset protection, cash flow planning (savings + effective debt management), tax-efficient investment strategies, enhanced tax planning, and legacy planning.

For dental practice owners, we help cohesively merge personal planning with business planning, effectively serving as a “team of Personal CFOs” to guide all areas of their financial lives.  We also guide dental practice owners in establishing qualified retirement plans for their practice.  This includes not only traditional Defined Contribution Plans, such as 401(k) plans and SIMPLE IRAs, but also more unique Defined Benefit Plans, such as Cash Balance Pension Plans.  Our team at Tenet specializes in Cash Balance Plans, which can be an incredibly powerful tax-advantaged retirement savings vehicle for dentists.

Another unique aspect of our firm is that we intentionally limit the number of clients each advisor works with.  This allows us to spend more time with each client and deliver a personalized, high-touch level of service.  From a value perspective, we believe maximizing time spent with each relationship provides for a more customized and deeper level of planning and management. 

View Kevan’s profile page on Wealthtender or visit his website to learn more.

Q: When you first speak with a dentist, what questions do you like to ask to better understand their unique circumstances and determine how you can best help them achieve their goals? 

When I first sit down with a dentist, some of the first questions I like to ask them are:

1. What are you most passionate about and value most?
2. What are your long-term aspirations personally?
3. For practice owners: What is your long-term vision for your practice?
4. If you imagine your ideal retirement, what does that look like to you?
5. What keeps you up at night from a financial perspective?
6. How are you currently balancing your practice, your family, and your finances?
7. And lastly, what would you value most in a partnership with a financial advisor?

These questions are incredibly helpful for our team to understand (1) what they care about most, (2) what aspirations they want their money to support, (3) what challenges and stresses they are facing now, (4) how they are currently balancing these challenges/stresses, and (5) from their perspective, how they see an advisor adding value. At Tenet Wealth Partners, we are planning-centric and client-focused stewards.  These are both a big part of our firm’s Core Tenets, which is rooted in prioritizing our clients’ needs, goals, and personal values as fiduciary financial advisors.

Q: For dentists thinking about leaving a salaried position to start their own dental office, what actions do you recommend they take before resigning and shortly thereafter? 

When considering the opportunity to start your own practice, you want to do your homework and create a business plan that lays out the short- and long-term vision for your practice.  Not only do you want to understand the upfront costs, but you also want to project out future costs as well as potential collections and net income you could generate as you grow. 

Several questions you may ask yourself are:

• What legal structure would you use for your business (e.g., LLC, S-Corp, etc.)? 
• Do you want to rent, build, or buy an existing office or practice?  How much would each cost both upfront and ongoing?  And, what are the potential long-term benefits of each?
• How many hygienists and office admins/managers would you need from a staffing perspective?
• What marketing strategies would you use to gain exposure and attract new patients?
• What technology and/or service providers would you use for payroll, accounting, and Human Resources support?
• What type of benefits, such as a retirement plan, would you want to establish for you and your future employees?
• What professional partners would you need on your “team” for guidance (e.g., Financial Planner, CPA, attorney, banker, etc.)?

These are just a few questions to consider, but the list of considerations is certainly longer.  This is why having a team of fiduciary financial advisors like ours at Tenet can be tremendously valuable.  We serve as your dedicated financial partner to coordinate both the personal and business aspects of your financial picture, which includes understanding how big decisions, such as starting your own practice, may impact your long-term prospects for financial success. 

Q: Is there a particularly memorable experience or a moment you recall with a dentist client when you first realized they have unique opportunities and circumstances when it comes to their financial planning needs? 

A couple of years ago, one of my dentist clients took the leap to start his own practice.  I had always been aware of how time-starved dentists can be and how much they had to juggle and balance between their professional and personal lives, including their finances.  However, I was able to see first-hand the many decisions and considerations he had to make with starting not just a new practice but his own business. 

From deciding the location of his office to marketing strategy and staffing, it made me realize and appreciate even further how unique and complex the planning needs are for dentists.  I also was able to see his passion come to life.  Just as we care deeply about our clients, dentists have such a high standard of care for their patients.  Hearing my client talk about his vision for his practice and the type of experience he wanted to deliver for his patients was both exciting and inspiring!

Resources to Help You Choose a Financial Advisor

✅ Top Questions to Ask a Financial Advisor

✅ How Much Does a Financial Advisor Cost?

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