The Professional Advisory September/2010

The

46 Professional

Advisory For Dental Professionals

IN THIS ISSUE DO I HAVE A GOOD LEASE? Ian Toms B.Sc. (Hons)

EMBRACE CHANGE Dr. Ron Weintraub

12 WAYS TO REDUCE THEFT IN YOUR DENTAL OFFICE David Chong Yen CFP, CA

A POTENTIAL PITFALL OF SELLING SHARES

LEGAL MATTERS WHEN SELLING YOUR PRACTICE David E. Rosenthal BA., LL.B.

GET MORE MONEY OUT OF YOUR CORPORATION Mark McNulty BA, CFP, CIM

CAN YOU AFFORD THE WRONG INSURANCE ADVISOR? Dr. Ian Wexler

Graham Tuck H.B.A C.A

plus THE WORST THING YOU CAN DO IS NOTHING! NOTES FROM THE EDITOR

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The Professional Advisory consists of a group of seven independent professionals who provide services to the dental profession, each of who specializes in a different eld. They have gathered to keep each other informed of the latest developments relating to the profession, and to produce this publication which is designed to provide expert information and advice solely for dentists and their advisors.

The Worst Thing You Can Do Is Nothing!

RALPH CRAWFORD BA., DMD Back in July a newspaper headline, Teen touches Afghan lives, caught my attention. It was the story of a Kelowna, B.C. girl, Alaina Podmorow, the founder of the non-profit Little Women for Little Women in Afghanistan, a fundraising organization that channels money for teachers’ salaries and training through Canadian Women for Women in Afghanistan.

Fascinated by the fact that 13 year old Alaina raised over $300,000 to help girls in Afghanistan go to school I was even more fascinated by eight words that is her inspiration to help others: The worst thing you can do is nothing!

Upon reading further into the story I found that Alaina first heard those motivating words when she was only nine years old. Her mother had taken her to a presentation by Sally Armstrong, the Toronto-based award winning author and human-rights activist who has chronicled the abuse of women and their struggle for equality under the Taliban.

Interested in how a nine year old child could be so galvanized and moved by a profound quote I checked further to see if it had even deeper roots than our Order of Canada Member, Sally Armstrong. Indeed, it seems they were first spoken by Theodore Roosevelt, president of the United States from 1901 to 1909.

“In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing” Any one of us looking back over our dental careers - whether graduating just this year or 40, 50, whatever years ago - many, many decisions had to

be faced as to what we were going to do now, soon or way down the road. And we can be sure what Roosevelt had to say is as true today as 100 years ago. And our Professional Advisory contributors make this abundantly clear.

In his Do I Have A Good Lease? Ian Toms outlines that circumstances change every day and not addressing the changes is probably the worst thing you can do. And when Ian Wexler asks Can You Afford the Wrong Insurance Advisor? doing nothing is not a great choice. That’s why he tells you what to look for and what to avoid. Selling a dental practice is never easy. So David Rosenthal presents 11 great points in making “right thing decisions” regarding Legal Matters When Selling Your Practice. To do nothing about internal control in your dental practice can lead to some pretty unfortunate circumstances. That’s why David Chong Yen lays out 12 Ways To Reduce Theft in Your Dental Office. Mark McNulty, as he guides you through on how to Get More Money Out of Your Corporation, clearly demonstrates that doing nothing about the dollars in your PC is about the worst thing you can do. Ron Weintraub’s Embrace Change leaves no doubt that what’s unique about change today is the rate of growth in information, technology and global economic events. By doing nothing about change can’t be a very wise decision. And doesn’t the very phrase A Potential Pitfall of Selling Shares have a warning that doing nothing isn’t a good thing? Graham Tuck makes it clear: keep your accountant informed so you can avoid paying more taxes than otherwise necessary.

The plight of the unfortunate throughout the world, the sustaining of our democratic principles, the regulation of our personal daily lives, and the successful operation of dental practices - it’s all pretty self-evident.

The best thing you can do is the right thing and the worst thing you can do is nothing. PA

crawford@dccnet.com

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Do I Have A Good Lease?

IAN D. TOMS B.Sc. (Hons) www. iantoms.com

Sometimes Here’s the problem. A lease is written at one point in time, but it describes a complex relationship between at least two parties that continues for many years. However, circumstances change every day.

Some circumstances are predictable, others are not.

Therefore, every provision of every lease may be appropriate, inappropriate, or of no consequence at a certain point in time depending on varying factors.

Consider BP & the Gulf of Mexico oil spill disaster BP Petroleum, Anadarko and Mitsui are collectively the “tenant” under a lease with the U.S. federal Mineral Management Service as “landlord”. The “premises” is roughly nine square miles on the floor of the Gulf of Mexico. The “rent” includes an initial bonus payment of $34 million plus ongoing royalty payments payable only after the well begins commercial production.

Therefore, if the well was one of the more than 80 per cent that never become productive, no rent would be payable. But circumstances changed. As it turned out, the well proved to be a high volume producer.

Unfortunately, the tenant lost control of the well which resulted in oil spewing into the ocean. Lease language, which was originally intended to relieve tenant of the obligation to pay rent before commercial production began, now meant that although tenant now owns a proven high volume well, it does not have to pay rent until it regains control of the well.

Technically, tenant is under no obligation to pay the cleanup cost of the spewing oil which cost by default belongs to the landlord! Who won here?

Consider your own lease Your circumstances are different now than when you signed your lease. For example, just as neither the landlord or the tenant in the BP disaster expected the blow out, no-one expected or predicted HST 10 years ago, but as of July 1, 2010 your rent increased by five per cent. Consider the following examples.

Perhaps you have the ability to terminate your lease at any time for certain reasons. This clause is typically included to protect the tenant should unforeseen circumstances arise. Considered from a different angle, this clause can interfere with landlords ability to finance against its property, and when this happens, landlord needs to ask tenant for a favour, providing tenant with an unexpected and welcome leverage position.

Your use and exclusivity clauses were originally designed to prevent a competitor from locating at the same property. A prospective tenant could approach your landlord with an offer to lease and use space for a use you have control of but are not using. You may consider allowing the new tenant into the property in an exchange from landlord for a concession you really need.

Or perhaps the only space that was available when you built your new practice was larger than you wanted, but you anticipated that you would grow into it over time. Now you find yourself paying far more rent than you had budgeted for because production is nowhere near what you had anticipated. Viewed from another angle, you may find the situation to be profitable if you can find a colleague to share the space with you, or “sell” the space back to the landlord.

Instead of enduring the burden of pay parking costs, consider leasing additional spaces from the landlord and subleasing parking spaces to others to offset your own costs.

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As a tenant, you need to actively manage your different times to fit current circumstances. PA position. Your lease will not always address or “fit” every circumstance. First, look for opportunities when the lease is being negotiated to install options Mr. Toms has been creating and preserving realty leasehold value for to address as many “what if ” scenarios as possible. tenants and landlords since 1986 and can be reached at (705) 743As time passes, adjust the lease and your tenancy by 1220, by e-mail at iantoms@pipcom.com, or through his web site at: interpreting clauses from different perspectives at www.iantoms.com

Embrace Change DR. RON WEINTRAUB www.innovativepracticesolutions.ca

We all know that our primary focus remains the delivery of quality, appropriate, cost effective patient-focused care. This should be a constant, core imperative of every dental practice. Having said that, let us not forget that change is a reality in our lives. What is unique about change today is the unprecedented rate of growth in information, technology, and recent global economic events. What drives the necessity for dentists to be proactive to change? The short answer is… because we must. We must change without compromising the values and strengths of our existing operations. We must also realize the specific relevance for change within the practice of dentistry. The motivating factors here are both economic and professional.

Economic Imperatives The recent global financial upheaval has had a profound influence on the psychology of all consumers, even though Canada has fared relatively well. Canadian dental patients are not immune to the aftershocks that directly affect their sense of financial stability.

This influences their comfort level in accessing certain aspects of some discretionary procedures, such as aesthetic treatments.

In its 2010 economic report, The Ontario Dental Association (ODA) points out some startling findings for the region with the highest dentist/patient ratio.

According to the report, the number of dentists has increased by 25 per cent. The growth rates in gross and net in the past ten years have increased by 93

per cent and 127 per cent respectively, but the study forecasts this growth is likely to come to an abrupt halt. The ODA findings mirror some of our empirical observations and have added considerable urgency to our call for future change. The report asserts that approximately 25 per cent of the profession has seen nothing but prosperity in the last decade. This newer generation of dentists may not, therefore, be prepared for the potential widespread slowdown that could last several years.

As the ODA points out, the new economy job market characterizes fewer industrial jobs and more service sector employment, resulting in a loss of dental plans.

The ability to commit to comprehensive dental care is radically lower for those without access to dental benefits. This is problematic on many levels.

All is not doom and gloom, however. One redeeming factor is that this generation values the health care benefits of dentistry far more than previous generations and will apply more of their budget or discretionary income to dental services. They will be more selective in prioritizing biological issues with special emphasis on children in the family than previously. We as practitioners need to recognize these economic red flags and embark on a slightly different path to future success.

Professional and Sociological Factors In addition to economic imperatives, professional and sociological factors influence the need to implement change in this new era. It’s vital to realize just how our existing and potential patients view our operation in light of the new realities. The ubiquitous Internet has had an extraordinary effect on health care providers by making health care information readily available to the public. Although many websites are informative, the risk of misinterpretation is great. Existing or potential patients may lack the ability to evaluate

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critically the volume of material at their fingertips, resulting in the phenomenon of the “semi-informed consumer.” We need to communicate better with our patients in order to clarify the appropriate level of care needed to maintain their optimal oral health. In this way we will better meet the expectations of the upcoming generation of patients.

Our patients are increasingly aware of technological advances in dentistry and they may want to be assured that our office is “keeping up”. They want to know if we are able to offer digital radiography, state of the art sterilization facilities, child-centred activity centres, patient coordination services, and e-mail confirmation.

Some consumers erroneously equate the level of high tech with the level of quality treatment. Nevertheless, we must deal with this perception and make changes that present us as being an ‘up-to-date office’.

Not surprisingly in this age, people use the Internet to form opinions as to which office to approach to become a patient. Next to a professional or peer’s referral, the office’s website is one of the strongest motivators

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in attracting new patients. We must maximize our potential by maintaining a compelling website.

In future articles, I will delve deeper into specific strategies to implement in your practices. In the meantime, I leave you with a statement that comes directly from our Practice Enhancement Engagement all team meeting: ”Initially, no one enjoys change except babies with wet diapers.” When you experience the benefit of change, you never go back. Therefore, avoid coasting, embrace change, and enjoy the rewards! PA

Ron Weintraub is a founding partner with the Bayview Village & Downtown Dental Associates and brings over thirty-five years of knowledge and experience in the practice of general dentistry to the Professional Advisory. Large companies such as Patterson Dental, Ash Temple Ltd, Henry Schein Arcona, & the former Canadian Dental Co. have benefited from his insight. As owner of Innovative Practice Solutions, Ron advises dentists on practice enhancement, practice purchases, sales, location evaluations, associate buy-ins, and business mergers. Dr. Weintraub can be contacted at (905) 470-6222 Ext. 221 or drronips@rogers.com.

12 Ways to Reduce Theft in Your Dental Office DAVID CHONG YEN CFP, CA www. dcy.ca

How often does the dentist and/or staff remind patients that regular dental examinations and good daily oral hygiene habits are critical to maintain good dental health and prevent periodontal and other types of oral diseases? Even though you continue to remind patients, there are always a few who choose to ignore your advice and preventative treatment until there is serious damage. They just do not think that it could possibly happen to them.

Frequently, even the dentist may suffer from a similar lack of foresight. Whether you are a dentist who just purchased your first practice or a seasoned practitioner

getting ready for retirement, many dentists do not establish an appropriate system of internal controls in the dental office until after the damage is done.

The damage in this case unfortunately results in theft in the office possibly by your trusted staff. Dentists are unfortunately vulnerable to theft in the office as they typically work hard in the practice and rely on competent staff to take control of the practice finances.

Although having a system of internal controls in your office does not guarantee you will never be a victim of theft or fraud - much like a patient cannot eliminate all possible dental problems by regular brushing and flossing - a proper system of internal control will minimize the risk of theft/fraud.

Here is a list of 12 internal controls which should reduce the risk of theft in your dental office: 1) Before signing any cheques, review all necessary supporting documents (i.e., matching invoices to packing slips/receiving reports). The receipt of

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supplies should be verified prior to approving invoices for payment. Refuse to sign blank cheques.

Do not allow use of signature stamps on cheques.

2) In order to prevent the same invoice from being paid twice, stamp all paid invoices “PAID” and record the cheque number on the invoice.

3) Review your cheque register periodically to look for cheques paid to any unusual suppliers or individuals.

If you see a supplier’s name that is not familiar to you, follow-up to ensure that the suppliers are being paid only for supplies actually received and used at your dental office.

4) Reconcile and review daily deposits - at least once a week - with cash balancing sheets on a spot check basis.

5) Reconcile your bank accounts on a monthly basis, as soon as possible after each monthly statement is received.

6) Review all write-offs and credits to patient accounts at least on a weekly basis. This will reduce the likelihood that a patient payment may be recorded as a write-off while the cash payment is stolen.

7) Establish a petty cash fund, which reduces the likelihood of theft. For example, a petty cash fund of $200 should have at all times cash, receipts or a combination thereof totaling a value of $200.

Replenish the petty cash fund when it is low (i.e., when it is comprised of mainly receipts) and only after reviewing supporting documents.

8) Ensure cheques are protected by implementing the following: a) cheques should always be pre-numbered; b) cheques should be stored in a locked place; c) keep all voided cheques and cut out the signature area.

9) Have all bank statements, including cancelled cheques, sent to your home address instead of directly to the office. This should allow you an opportunity to review the bank statements and cancelled cheques prior to your staff. This review would hopefully allow you to identify any unusual activity/theft. If a cheque is paid to an unknown supplier or individual, then investigate.

10) All cheques received from patients should immediately be stamped “FOR DEPOSIT ONLY”.

This should avoid or prevent any unauthorized cashing of cheques by personnel. Also, deposits should be made on a daily basis to eliminate or minimize excess cash on hand.

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11) Duties should be segregated, where possible.

The duty of reconciling the bank statements should be performed by a staff person who is not involved in receiving payments, recording transactions or making deposits. If possible, have a trusted family member handle the reconciliation of the bank statements.

Otherwise an independent individual will suffice.

12) Use password protection in your dental billing software to minimize possibility of theft (i.e., write off of patient accounts should be done by a selected few). Maintain controls over Interac machine to ensure refunds to patients cannot be issued without proper authorization.

The implementation of internal controls can never guarantee that problems will not occur. However, being involved with the financial affairs of your practice will assist in responding in an effective and timely manner should any unusual activities take place. It could also reduce the likelihood of theft in your office.

David Chong Yen, CFP, CA of DCY Professional Corporation Chartered Accountants is a tax specialist and has been advising dentists for decades.

Additional information can be obtained by phone (416) 510-0888,fax (416) 510-2699,or e-maildavid@dcy.ca,www.dcy.ca. This article does not replace professional advice.

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A Potential Pitfall of Selling Shares shares of the practice.

It is a nice plan to leave profit from the practice, in the practice, with only a 16.5 per cent tax rate of the GRAHAM TUCK professional corporation. But keep your accountant informed as to when you intend to sell your practice H.B.A., C.A. so that the accountant can have you come on side www. ppsales.com regarding the 50 per cent rule. Also, there is a 90 per We are often approached by dentists who have cent rule whereby non-practice assets must be under decided to sell their practice - now. They figure their 10 per cent of the sale on the date of sale. affairs are in order as they incorporated a number of We are currently working with three dentists who are years ago and they wish to sell shares to keep their in contravention of the 50 per cent rule. They have taxes to a minimum from the sale. all decided to not sell shares and pay the taxes from Let us say that their practice is worth $750,000. I an asset sale of their practice but will draw out the look at their balance sheet and notice that they investment money in the future when their tax rate have investments located in their practice valued at is lower. $1,000,000. This is a problem!

In summary, keep your accountant informed about

There is a tax provision for professional corporations your sale intentions so that he or she can work with that limits non-practice assets to less than 50 per cent you to avoid paying more taxes than would otherwise of the value of the practice including the investments. be necessary. PA The example above would be in contravention of that tax provision and the dentist would not be permitted to participate in the $750,000 no tax situation with Graham Tuck, H.B.A., C.A. is the broker/owner of Professional Practice the sale of shares. This is called the 50 per cent rule. Sales (Ontario) Ltd., which specializes in the valuation and sales of dental The dentist would have to clear out the investments practices. He can be reached at (905) 472-6000 or 1-888-777-8825 from the practice two years prior to the sale of the or e-mail at: grtuck@rogers.com

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Legal Matters When Selling Your Practice DAVID ROSENTHAL BA., LL.B. Before selling your dental practice, there are many legal matters to consider. Ideally many of these matters should be dealt with very early in the process.

The following points will help a seller make informed decisions about the nature of the sale and ensure there are no unpleasant and potentially costly surprises later in the process: 1. Price Determination - How is your sale price determined? For an asset sale the purchase price is allocated to various assets. A proper valuation of your practice by a reputable appraiser is important and will assist in determining asset values. Review the allocations carefully with your accountant to help finalize the sale price.

2. Professional Corporation - If your practice is owned by your dental professional corporation (PC), you need to ensure the PC legal documentation and minute book are up-to-date and in compliance with the laws relating to the PC - especially the rules of the Royal College of Dental Surgeons of Ontario.

3. Assets or Shares: What are you selling? - If you own your practice personally as a sole proprietor, before closing you might be able to transfer the practice to your PC and then sell the PC shares. There are many tax and legal considerations and differences between a share sale versus an asset sale. Hire an accountant and lawyer who understand the issues when selling dental practices. Seek out proper advice to save taxes and get the most money for your practice.

4. Cost Sharing or Partnership - If you are currently in a cost sharing arrangement or partnership; review these agreements with your lawyer to see how they impact on the sale. Consider if you need your partners or cost-sharers consent to sell your practice.

Are you required to offer your practice for sale to

your partners or cost-sharers first before you can sell your practice to a third party?

5. Sale Agreements - This is the definitive legal document so make sure you understand all your obligations, including your representations and warranties, covenants, conditions and indemnities.

6. Your Current Associates - Consider what happens to associates during a sale process. Review your associate agreements to determine what non-competition clauses bind the associate.

7. Premises Lease - A purchaser (and purchaser’s bank financing the transaction) will want a long term lease in place with renewal options. Review your existing lease to see what is required to transfer the tenant’s obligations to the purchaser. Warning: your lease may require you to remain liable for the remaining lease term even on a sale of your practice!

8. Leased Equipment - Review all existing leases to determine prepayment privileges and penalties. Often the penalties are severe so consider requiring the purchaser assume those leases with a possible reduction in the sale price. This may be cheaper than paying the penalty to terminate and payout the lease.

9. Staff - possibly the most important and misunderstood area when selling your practice. There are potentially large liabilities regarding your employees upon terminations. Ideally the purchaser will keep all employees and assume all liabilities for staff.

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10. Non-competition or Non-Solicitation Covenants - How long are you willing to stay after the sale and on The purchaser will want you to agree not to compete what basis? within a certain area for a certain time after closing.

What are your objectives after closing? Will you retire or open a new practice across the street?

11. Vendor associating for transition after closing - David Rosenthal is a senior lawyer with Spiegel Rosenthal Professional Corporation whose practice is devoted to corporate, commercial and Purchasers typically want you to remain at the practice business law, with special emphasis on advising and consulting for the to assist in the transition or for a longer term association. dental profession. He can be reached at (416) 865-0736; or fax to Think about what your expectations are after closing. (416) 203-8592; or e-mail to david@drlaw.ca.

Get More Money Out Of Your Corporation MARK McNULTY BA, CFP, CIM www.yournumber.ca

If you’re like most of our clients, you have a significant amount of money building up inside a professional corporation (PC). The reason is simple - for every $100,000 our clients leave in their professional corporations each year, they defer roughly $30,000 in income tax.

An investment within your corporation is the same as any other. It should complement and fit in with the overall portfolio. In other words, the corporate investment account should be managed in conjunction with your RRSPs and other investment accounts.

Think of it as another pocket in the same pair of jeans.

There are some issues unique to investing inside a corporation. The first thing to be aware of is that only active business income earned inside your corporation is eligible for the special Small Business Deduction (SBD) tax rate. The SBD tax rate for qualifying corporations is less than 20 per cent on the first $400,000 of active business income.

However, passive investment income does not qualify for this special tax treatment. Passive investment income, which includes interest income, dividends

and capital gains are all taxed at different tax rates. For instance, interest income is taxed at a 50 per cent tax rate!

Capital gains however, are taxed at only 25 per cent.

Consider this situation. Let’s say you have $100,000 in cash in your PC to invest. Any interest earned would be taxed at almost 50 per cent. Therefore, if you invested your cash in a bank account earning three per cent, at the end of the year you would get a tax bill for $1,493.70.

However, if instead you invest your cash in a corporate class money market fund where the interest income is taxed as a capital gain and NOT as interest income, you could cut your tax bill in half to just $746.85. In addition, with the corporate class money market fund you would only have to pay tax once you actually sold the fund, which allows you to defer the tax until you are ready to cash in the investment.

One of the big advantages of investing within your corporation is that you have control over the amount and the timing of the income you receive personally.

This is beneficial because you will only pay personal tax when the corporation actually pays out money to you, which can be years down the road. And if down the road you are in a lower tax bracket, you can actually reduce and in some cases eliminate the taxes.

In contrast, if the investments are held in your hands personally, the tax on the investment income would have to be paid in the year it is earned.

Of course, you cannot use the money in the corporation for personal use until you take it out and pay the tax.

Therefore the question is, how can you get the most money out of your corporation, after-tax.

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The following is a list of strategies we are employing at this time to get the most money out of corporations.

One of the big advantages 1. Distribute to shareholders in lower tax brackets of investing within your if you have a family member with no other income they could receive $30,000 in dividends from your corporation is that you have professional corporation and pay no income tax. control over the amount and 2. Alternatively, wait until you are retired and in a the timing of the income you lower tax bracket and you can distribute the money to yourself over a number of years with little or no tax. receive personally. This is 3. Pay dividends to yourself instead of salary. A beneficial because you will $100,000 paid salary would generate $27,600 in only pay personal tax when the income tax. If you paid it by way of dividend, you would save over $2,000! corporation actually pays out 4. Generate Capital Gains - investment income earned money to you, which can be on the money in your corporation will be 50 per cent. taxable. However, if you earn a capital gain then only years down the road. half the income is taxable. The other half goes into what is called the capital dividend account and can In almost every situation, we employ more than two be distributed tax-free to you. Note: you do not need of these strategies. Ideally, we implement them all for to be invested in the stock market to generate capital maximum tax savings! PA gains.

5. Generate Eligible Dividends - the dividend tax credit is higher on eligible dividends (dividends paid by public corporations) than ineligible dividends Mr. Mark McNulty BA, CFP, CIM, is a financial advisor with Raymond James Ltd., Independent Financial Services - Member CIPF. This article is (those paid by Canadian controlled private for information only. Its opinions are those of the author, not necessarily corporations). Ask your advisor how to generate those of Raymond James Ltd. He may be contacted at 905-470-6222 eligible dividends to increase your tax credit. ext 209 or mark.mcnulty@raymondjames.ca.

Can You Afford The Wrong Insurance Advisor?

DR. IAN WEXLER www.protect-ins.com

Perhaps the single most important variable in obtaining the right insurance protection for you, your family, and your practice is choosing the right insurance advisor. The reality is that irrespective of the coverage you purchase, whom you choose to assist you, whether it is an independent advisor or a representative

of The Canadian Dentists’ Insurance Program, can mean the difference between financial security or financial devastation in the event of a disability claim.

The following is a list of specific reasons to both choose and avoid certain insurance advisors. Once you have reviewed all issues listed, you will better understand whether your advisor fits the bill or whether it’s time to make a change.

What to look for 1. Specializes in the dental profession. Understanding the variables pertaining to you and your practice can have a significant impact on the type, amount, and structure you have, as well as a claim. Ideally your

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advisor should understand differences among: a. New grads b. General practitioner versus specialist c. A new versus established practice d. A solo practice versus partnership e. Associate versus owner f. The impact of hygiene, associates and partners g. Practice type, size, and location h. Goodwill issues and sale-ability i. Retirement and transition issues 2. Treats you with respect and professionalism 3. Represents insurance products that are “guaranteed and non-cancellable” 4. Is not “new” to either the insurance business or working with (many) dentists 5. Has handled “many” successful claims AND has an entire claim protocol that includes: a. Overseeing the entire claim with you and /or family members b. Interviewing you with respect to your“limitations from practicing” c. Reviewing all claim forms before submission d. Interacting as needed with claim adjudicators e. Ensuring all important timelines are met f. Assisting you with submission of all financial,

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medical, and other documentation 6. Someone with whom you develop a high level of trust 7. Understands and compares ALL products 8. Provides a high level of specialization in insurance products versus being a “jack of all trades.” Insurance products are extremely complicated. You may wish to deal with an advisor who either specializes in a particular area of insurance, e.g., life insurance/estate planning or living benefits, or has specialists in each particular area 9. Is 100 per cent independent and represents ALL major insurance companies 10. Provides exceptional service including regular communications and reviews 11. Is accessible 12. Has preferred status by insurance companies (underwriting, claims, etc.)

13. Reviews and assists with partnership, costsharing, shareholder agreements in areas pertaining to insurance 14. Provides strong problem solving capabilities…i.e., helping difficult to insure clients 15. Provides a range of value added services 16. Has the capacity to expand their business 17. Has a strong professional network that includes accountants, lawyers, financial planners, practice

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management consultants, bankers, etc.

18. Has a “Succession Plan” to look after your needs down the road 19. Has a “support team” that is available to assist you, and offers a superior level of service (most advisors either work alone or with one support staff ) 20. Enjoys a stellar reputation What to avoid 1. Little or no dentist and practice understanding 2. Pressure, guilt, and scare tactics a. This is one of the most important reasons not to choose a particular advisor. Unfortunately many are subjected to this while in dental school.

3. False promises of the best deal and cost available.

Warning: generally, no advisor can get you a better deal and lower cost than another 4. Poor communications, e.g., failure to contact you for reviews 5. Do not choose an advisor simply because they are a patient or family member 6. Advisors who portray themselves as a “fighter or leg biter” at claim time. Claims are best dealt by amicably assisting the claimant and the claim adjudicator to assemble the most complete claim possible 7. NOT independent and NOT allowed to represent all major insurance companies 8. Sells primarily one company’s plans 9. Leaves “diagnosing your own insurance needs up to you” 10. Few years in the business

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11. Focuses on permanent life insurance without paying attention to living benefits 12. Little or no claims experience, and poor claim assistance, e.g., only sends you the claim forms.

You should ask your advisor about their claim experience and EXACTLY how they handle them.

If you decide to make a change Switching insurance advisors can range from being fairly easy to “uncomfortable.” While certain advisors will respect your new decision and make the switch easy for you, others will try to guilt and harass you into staying with them. Issues to be aware of include: 1. How your new and old advisor are compensated for “taking over” existing plans 2. How you wish to notify your old advisor of your decision to make a change. This should always be done in a professional fashion via a courtesy phone call, letter, or email 3. Submission of necessary paperwork to secure a smooth transition for taking over as “agent of record” on existing plans. PA

Dr. Ian Wexler is Canada’s leading authority on insurance issues for dentists. He is the President of Protect Insurance Agencies Inc. in Toronto which provides specialized expertise in life, disability, critical illness, long term care, annuities, and other insurance products and services to professionals, executives, and business owners across Ontario. He can be reached for questions or other enquiries at (416) 391-3764 or drwex@ protect-ins.com

The views expressed in any article are those of the author alone. They should not be acted upon without the advice of your “professional advisors”.