Health care M&A landscape will be ‘critical’ for advisors

Just as dentists often tell their patients it’s important to maintain good oral care, Feraud Calixte, senior financial advisor at Modera Wealth Management, repeatedly tells his clients who are dentists and doctors that it’s important to maintain financial care. 

However, it can be hard for health care professionals to do that, Calixte explains, as they are in medical school for a long period of time, and accumulate student debt, causing them to miss out on life’s little pleasures as a result.

“I wanted to make it my personal mission for those who decide to serve in that way that they should not get to a place in their later years where they’re not financially secure,” says the advisor, an InvestmentNews 40 Under 40 honoree. “My goal is that any of the health care professionals that come into my orbit, we want to make sure that they and their families are taken care of, and they can really accomplish the goals that are important to them.”

As in many other industries, including the wealth management space, M&A activity is going strong in health care, with doctors’ and dentists’ practices being bought by large corporate entities that are often backed by private equity, he says.

Calixte points out it’s critical that advisors understand the landscape.

“That could be a huge windfall for your clients,” he says. “And it could present some other challenges for your clients. Like with other industries, they face shifts in technology that can impact their industry.”

Radiology is one field Calixte points out because of certain advances in technology and AI that can have an impact. He also noted that some universities are waiving medical school tuition, which points to an additional conversation advisors should have with their clients who are health care professionals.

“How does that affect the future generation of physicians? If you look at some of the discrepancies of pay with some of these different specialties, we’re finding that some people are opting not to go into one specialty versus another. What does that trend look like if we start to see that the pay gap becomes widened between the different specialties?” he noted.

Before Calixte joined Westwood, New Jersey-based Modera, he managed his own practice, where he worked with medical professionals. This was “happenstance,” he says, because he comes from a family of doctors and has friends who are dentists.

Working with doctors and dentists is just one of the specialties of Modera’s advisors. Calixte noted that he has a colleague in the Atlanta office who has been working with the same dentist for more than 30 years.

“We just have a deep bench of professionals who work with different doctors and dentists coming from different sides of the business,” he said. “We really understand a day in the life of these professionals, and we try to fit into their busy lives. And I think they appreciate that, and we’re able to do that because we understand them.”

Part of that understanding comes from knowing what frauds health care professionals are falling victim to; Calixte points out that those in the industry are often susceptible to investment scams.

“Sometimes they feel that they’ve gotten to a place in their careers and have gotten to some income level where they should be exploring some of the more exotic stuff,” he says, noting that clients may want to talk about hedge funds or private equity, rather than low-cost index funds.

Calixte reflects that his role as a financial advisor serving the health care industry also involves educating clients, as he can teach them the benefits, advantages, and disadvantages of those different asset classes, and how they could fit into the client’s overall financial plan.

“If you don’t have to take risks but still achieve your goals, it seems like that’s a win-win for everyone involved,” he added.

Name: Feraud Calixte
Position: Senior financial advisor
Company: Modera Wealth Management
Founded: 1983
Firm AUM: Over $12.5 billion

Related Topics: Modera Wealth Management