A pill or a plan? The path to financial health for New Zealand medical professionals

Much like the patients they care for, it’s no secret that many medical professionals have faced challenges in navigating our recent economic context. Fluctuating income streams, workforce shortages, mounting regulatory complexity and compliance obligations are now part of the everyday reality for doctors and specialists. What’s more, financial pressures are a leading driver of negative wellbeing among New Zealand business owners and leaders, as evidenced in the biannual BDO Business Performance Index.

So, what does the path to financial health look like for New Zealand’s medical professionals? Are there challenges and solutions bespoke to the medical sector? Finally, is there a quick cure, or does the road to recovery require access to the right specialists and careful planning?

Not surprisingly, Michael Nes, BDO Advisory Partner and medical sector specialist based at our Hawke’s Bay office, often observes medical professionals looking for a clear and obvious ‘fast track’ to better financial fortunes – a common approach among most savvy business operators. However, he sees the path to sustained financial health for medical professionals and practices being highly bespoke.
 

“Medical professionals are not a homogeneous group, and one of the most common misconceptions I see is the assumption that a single advisory model will work for everyone. Each practitioner operates within a unique environment – balancing public and private practice, navigating different income structures and moving through distinct career stages that require different financial strategies. For many medical professionals, the challenge is no longer just delivering excellent clinical care. It is managing a complex business and financial environment alongside it. Whether that is structuring income efficiently, planning for a buy-in, or preparing for retirement, it’s important for medical professionals to seek advice that’s practical, compliant and forward-looking”.

Medical professionals are all too familiar with the need to encourage patients to seek specialist help early in preventing broader health issues. While this comes from a place of patient care, it also typically enables the practitioner to be more effective in their treatment. Michael sees important synergies here with the financial health of most medical practices:

“Many of the well-known success factors in effective patient-practitioner relationships should not be overlooked by today’s medical professionals in building trusted relationships with their accountants and business advisors. Often a small step in sharing a concern or question with an expert can be pivotal in the betterment of their practice and its long-term viability”.

 

Navigating a complex healthcare landscape - finding a place to start

One of the defining features of medical careers today is financial complexity. Many practitioners operate across multiple income streams, often combining salaried employment roles with private practice, locum work or partnership arrangements. Whilst this flexibility can be beneficial, it also introduces volatility and risk if not actively managed. 

Some of the most common challenges Michael sees among today’s medical practitioners include:

• Fluctuating income between PAYE and private practice

• Provisional tax volatility and exposure to penalties

• Ongoing compliance demands that compete with patient time

• Difficulty forecasting cashflow in busy or transitional periods

While these challenges are increasingly common across the medical sector, they are also manageable with the right support, structure and forward planning.

So where should medical practitioners start in taking on these matters with their financial adviser?  Michael explains that it’s vital for accounting, tax and advisory obligations not to add to existing challenges. Instead, medical practitioners need to establish a relationship with an accountant or CFO who provides clarity, confidence and strategic support, so they can focus on what matters most; patient care, professional fulfilment and long-term security.

Commonly, medical practices, are without in-house accounting functions and support, let alone a Chief Financial Officer (CFO). Given recent economic challenges, few if any, are in a position to hire these roles, despite their importance in finding sustained financial health for medical practices. Additionally, many medical professionals can find the recruitment processes time consuming and complex. For many medical professionals, the challenge isn’t recognising what’s needed — it’s finding practical, accessible support that fits around clinical commitments.

For this reason, Michael has seen recent growing demand for Virtual CFO services. These can range from supporting short-term or one-off finance projects, through to outplacement of his accounting and advisory team members to a business for a set period. With the latter scenario in particular, the key to ongoing success is the sharing and trust between parties. This helps practitioners feel less alone, supporting sustainable careers and not just compliant practices.

“Regularly working in closely with our clients who are general practitioners, anaesthetists, surgeons, medical specialists and physician groups offers broad hands-on experience which fundamentally helps both parties. Not only can we bring a fresh lens to the practice’s financial and business needs, the deep insights we gain can also help us to anticipate future issues before they become problems.” explains Michael.

 

Bringing your practice's financial decisions together

The increasingly bespoke and complex financial needs of successful medical practices means that Michael often sees medical professionals outgrow traditional siloed advisory relationships as their careers progress. Tax accounting structuring succession and investment planning all become interconnected – and managing these through multiple disconnected advisors can be inefficient and frustrating.

With this in mind, Michael sees key value in bringing these services together under one trusted relationship for clients who can then benefit from;

• Timely access to both local and national specialists
• Support with practice buy-ins restructures and exists
• Retirement and succession planning tailored to medical careers
• Technical tax advice for complex or no standard scenarios.

 

Finding clarity in a complex healthcare financial landscape

In line with growing economic optimism for New Zealand’s broader business sector, Michael is encouraged by the outlook for medical professionals.

“Unlocking future financial health – sustainable practices and rewarding careers – comes down to removing complexity and seeking clarity by drawing on the trusted specialists around you - enabling medical professionals to continue caring for our communities with confidence.”

Despite ongoing economic and regulatory pressures, many medical professionals are finding confidence in simplifying complexity and surrounding themselves with the right support.
 

How BDO can help

For more help and business tips in navigating the priority issues for your practice, view the BDO Business Performance Index or connect with your local BDO adviser.