Giving clients’ finances a health check

Carolyn McClanahan of Life Planning Partners

Carolyn McClanahan looks back on her career change from physician to financial planner and how the two professions are more interlinked than she anticipated.

As the famous quote goes, nothing is certain in life except death and taxes. Carolyn McClanahan, founder of Life Planning Partners, knows both intimately, having started out as an emergency room physician. “Now, nothing seems as challenging as that,” she says.

That’s not to say, of course, that death never comes up in her work as an advisor, it’s just that now she helps clients prepare for it, instead of helping them delay or prevent it. As for taxes, they’re one of the reasons she changed careers in the first place.  

McClanahan’s introduction to the world of financial planning was born of personal necessity. Her husband had inherited a modest sum and wanted to use it to make a career change. He was an engineer, but he wanted to be a track and field coach and a photographer. Not wanting to become the sole breadwinner, McClanahan insisted that they speak with an expert.  

“We interviewed all these financial planners to see if my husband could change careers and none of them really gave good financial planning advice,” she recalls. “It was all about investments. They didn’t do cash flow planning, budgeting or help us figure out tax efficiency, or any of what we expected from a financial planner.”  

Soon, it wasn’t only her husband looking to change careers, after McClanahan decided to go back to school to learn about financial planning. By 2004, she had founded her firm, offering comprehensive financial advice on a fee-only basis. “I fell in love with it and haven’t looked back.”  

Despite the career U-turn, her training as a doctor still provides the backbone for her financial practice. “When I became a financial planner, I didn’t realize how just how many intersections there were between health and finance,” she says. This prompted her to get on the speaking circuit with a talk called “How to Improve Your Insurability” about what to share with your doctor to get the most favorable insurance rates. After that, she did another popular talk that took a deep dive into the Affordable Care Act.

“Then I started seeing these other intersections, like end-of-life planning, or when somebody is diagnosed with a terminal illness,” she says. “I just saw so many sad things [where advisors] could have helped clients better prepare financially for the end of life.” 

Physicians and financial planners, she adds, both seek answers to the same fundamental questions from their patients and clients: Am I going to be OK? Both professions also have to deal with people who assume they know what they are doing, like the person who stays in a job they hate because they hope to retire sooner.

“That’s not really the best route,” McClanahan said. “The best route is to find work you love and work as long as possible doing something you love. We end up doing a lot of career planning.”    

Like any good doctor, McClanahan realized that the best way to ensure her clients’ financial well-being was with a holistic approach, making sure clients were doing the right things financially to support their goals and values. That means, in addition to making sure they’re saving and spending appropriately, checking that they’re not over-insured or underinsured and that they don’t do foolish things with their money because of cognitive decline.

Her biggest challenge, it turns out, was managing business growth. She knew she needed to hire an investment manager, but did she need administrative support? A marketing department? “Do I try to grow a billion-dollar company? Or do I stay small? I realized my love is not growing and managing a bunch of people.”

McClanahan stayed small, relatively speaking. “What ended up happening was we went years when we quit taking new clients — which people say is heresy — but in reality, it made us all love our work because we were doing a great job taking care of the clients we had.”  

Keeping her firm lean meant each advisor could specialize in an aspect of planning, while also staying up to date with every client’s full plan. While McClanahan deals with estate and tax, another team member may handle projection planning and insurance. This division ensures that all the bases are covered. “We all split up the work. We all know all the clients,” she explained.

Having a small, close-knit team does present challenges, though, like having an internal succession plan. In McClanahan’s mind, selling to a larger group would “dismantle” everything they’ve done so far. “We love our clients too much to do that,” she says.

But, not surprisingly, she has a plan. She’ll allow Life Planning Partners to grow, just a little, so that nine or 10 years from now, there will be a larger pool from which she can choose a successor.  

“I still don’t want to be the billion-dollar firm,” she said. “But maybe we’ll be the $600-to-$700 million firm.” 

FAST FACTS

Name: Carolyn McClanahan

Company: Life Planning Partners

Founded: 2004 

Number of client families: More than 90

Recognition: Investopedia Top 100 Financial Advisors 2021; InvestmentNews Icons & Innovators  December 2017; InvestmentNews Women to Watch, November 2016; NAPFA Special Achievement Award, June 2016.