How an Orthodontist Teamed With His Advisor to Help Medical Pros Avoid ‘Wealth Erosion’

To be blunt, doctors and dentists are rated lousy investors. But here’s Mart McClellan, an orthodontist who not only knows how to expertly manage his own assets but helps other health professionals manage theirs — and retire with full income replacement, as he tells ThinkAdvisor in an interview.

Co-founder of Macro Wealth Management, an RIA based in Peoria, Illinois, McClellan needed a smart FA himself when in 1997, a colleague referred him to Tim Streid, an independent advisor previously with Prudential Financial Services.

In the interview, McClellan and Streid describe how, after a fruitful seven-year client-advisor relationship, the two launched an advisory to serve health professionals. That was in 2004, the year McClellan became a licensed FA.

Macro Wealth now manages $24 million in assets from clients in 32 states. McClellan, who meets with them online — an approach in place even in pre-pandemic days — continues to run his full-time orthodontia practice in Kenilworth, Illinois, some 135 miles from Peoria, where Streid is located.

In our conversation, the advisors discuss the “financial treatment plans” they work up for clients and how they help them avoid “wealth erosion.”

“Indexing-plus” is their investing strategy, wherein they employ an economic model to analyze potential significant financial decisions, Streid says. The model, which he began using in 1994, “accelerates” wealth.

ThinkAdvisor recently held a phone interview with McClellan, 56, and Streid, 57. The two co-authored an Amazon bestseller whose title bridges McClellan’s two disparate, though surprisingly compatible, specialties: “Your Retirement Smile: The Treatment Plan for Pay-Cut Prevention in Your Golden Years.”

Here are highlights of our conversation:

THINKADVISOR: Your advisory client niche is dentists and doctors. Health professionals are famed for being bad investors. Is that true, and if so, why?

MART MCCLELLAN: Yes. There are a couple of reasons. Two are lack of education and lack of time to figure out the best method to go about investing their assets.

What other reasons?

Many times people in financial services who figure that doctors have a lot of money [lead them into] investments they shouldn’t make. Doctors don’t have time to figure it out — so they just let them do it and get themselves into trouble.

How have your clients weathered the pandemic fallout thus far?

MM: In March, we went to a bear market very quickly. [In such situation], people who are positioned appropriately in their financial life can sprinkle a little money in the market — and the next thing they know, the market’s recovered. Our clients that did that are very happy now.

TIM STREID: [Overall], clients haven’t been negatively impacted. They were very well prepared and had strong liquidity, which we encourage them to have — at least 50% of one year’s gross household income.

Have you changed your advisory practice amid the pandemic, like moving to online meetings?

TS: We’d been doing virtual meetings with clients for years. So it already had become a huge part of our business.

Dr. McClellan, turning to your orthodontia practice, during the shutdown, how did you keep patients who were in Invisalign braces and needing weekly adjustments on track?

MM: They didn’t skip a beat with their treatment. They took pictures [of their teeth] with cell phones and downloaded them so I could see them on a dental monitoring website and make diagnoses virtually. Every week, for about six to 10 weeks, we taped bags of Invisalign aligners [that move teeth to straighten them] to the front door of my office, and the patients would stop by and pick them up. Pretty neat!

Why did you aspire to be an orthodontist?

MM: I didn’t even have an interest in dentistry: In college, I wanted to be a doctor. Then, in my junior year, I went on a mission trip to Kenya and was introduced to an oral surgeon, who taught me how to pull teeth. This might sound a little sadistic — but I did enjoy doing it! So instead of going to medical school, I decided to go to dental school — but to be an orthodontist, not an oral surgeon.

Does being an orthodontist help you as a financial advisor?

MM: The biggest impact is the trust factor. My [dentist and doctor] colleagues and friends know I’m someone they can trust.

TS: Mart’s having a full-time orthodontia practice brings a ton of credibility to the table. Because he’s one himself, he knows exactly what [health professionals] deal with on a day-to-day basis, including being bombarded with financial “opportunities.”

I imagine that retirement planning is big with your clientele. Right?

MM: It’s huge. The No. 1 issue for every one of our clients is: What’s my retirement going to look like?

Do you ever suggest annuities?

MM: Yes. From a retirement-planning standpoint, annuities are very effective distribution tools to provide guarantees on income in retirement that you can’t get anywhere else — and oftentimes, increased income as well.

As comprehensive wealth managers, what’s your role?

TS: To be the macro manager for our clients. Their other advisors — like accountants and attorneys — are looking at only one or two areas, not how all areas interact when it comes to decision-making. We’re trying to bring everyone together to make sure they’re on the same page and making the right decisions for their client’s financial future.

You provide a “financial treatment plan.” Tell me about that.

TS: We use an economic model, a framework, to analyze every financial decision before we make them and take action. The model [licensed from Leap Systems] can simulate the [outcomes] of those decisions. We create a strategy not only of accumulating wealth but accelerating it and getting multiple uses of the dollar over the course of a client’s career.

How do you obtain multiple uses?

TS: Just as banks make money by not letting it sit in one place very long and moving it constantly, when you move your money [as an individual], you [too] can accelerate your wealth.

Why is it important to discuss “wealth erosion” with clients?

MM: Most people don’t realize that their money is under attack daily from many wealth-eroding factors, such as taxes, inflation, losses, market fluctuations, and changes in tax laws, interest rates and technology. So there’s a lot that impacts your ability to grow your wealth; and if you don’t have a firm understanding of them, you’ll never feel like you’re getting ahead.

What happens when you explain that to clients?

MM: They realize that, for instance, they really need to save more or have a better understanding of how to [reduce] taxes or how to manage market risk.

Whose idea was it for you two to launch a financial advisory?

MM: Mine. I was Tim’s client for almost seven years. At first, I approached him for us to lecture at dental schools and write articles for trade magazines. That gained traction quickly; and so, we thought, maybe we should make this partnership a business and open our own advisory. I became a licensed advisor in 2004.

Tim, you’ve been in the industry for 31 years as a CPA, an advisor at Prudential Financial Services and then, since 1994, an independent FA. How did you view the idea of joining forces with Mart?

TS: I was very excited to partner up with him. He’d been a client for years, so we had a lot of conversations about finance. I always knew he had a passion for it.

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