Chapter 7 – Introducing Terry’s client: Dr Amit Vohra and the GPRA

Terry McMaster had a series of meetings with Dr Amit Vohra[1] in late 2013 and early 2014. Dr Amit was the CEO of the General Practice Registrars Association.

Dr Amit was previously a senior Royal Australian Navy officer, and as indicated elsewhere, holds a Ph.D. in science and a MBA. These meetings discussed, amongst many other things, the “McMasters’ Financial Planning for Doctors” manual, and whether McMasters’ could create a similar manual explaining similar issues facing general practice registrars.

Dr Amit is now the General Manager of Health Solutions at Sonic Clinical Services. Does Amit seem like the sort of guy depicted in ASIC Example 3 – Advice of Terry McMaster[2]?

The GPRA’s financial planning manual: Financial Planning for Registrars

The GPRA was concerned about commission driven sales pitches from unscrupulous accountants and financial planners selling hard to GPRA members.

Many firms specialize in selling expensive and unnecessary financial products to young doctors, via sponsored university cocktail parties and similar marketing strategies.

Dr Amit asked Terry to create a registrar specific manual discussing the common problems encountered by young doctors. He wanted warnings about what to watch out for.

Dr Amit stressed content for young doctors. Particularly commission free and tax-deductible risk insurances, commission free super[3], wills and estate planning, asset protection, co-habiting issues, cars and travel.

The GPRA manual was completed in late 2013.

 

This extract gives an idea of this manual’s content:

 Terry’s advice to Dr Amit

Over a coffee Dr Amit told Terry of his plan to set up a SMSF, transfer his HESTA benefits to it and borrow to buy a house in Melbourne’s western suburbs, near Dr Amit’s family home. Terry was not enthusiastic. Terry suggested Dr Amit instead get commission free low-cost Australian share-based index funds, eg Vanguard[4]. Terry and Dr Amit discussed Terry’s concerns. Dr Amit remained insistent on his SMSF investing in property. Eventually Terry surrendered and captured their thoughts in an SOA dated 12 February 2015.

What does Dr Amit have to say about this matter?

First, Dr Amit says decided to set up a SMSF and borrow to buy a property. Terry did not initiate the idea and did not encourage it.

Second, Dr Amit says Terry discouraged the idea, and suggested commission free index funds instead.

Third, Dr Amit says he engaged Terry because Terry did not accept commissions and employed a team of experts[5] who specialized in their fields, such as SMSFs or risk insurances.

On Tuesday 19 February 2019 Dr Amit wrote to Terry:

Terry’s advice to Dr Amit was commission free

Terry’s advice to Dr Amit was commission free: all insurance commissions were remitted to him. Making sure his insurance premiums were tax deductible and commission free means over the first three years the net premium cost reduces to just 28% of the original cost[6].

Terry did not accept commissions. Neither did his McMasters’ colleagues. Terry’s advice included the following passage:

Just another part of Terry’s advice to Dr Amit the AIC officers decided to ignore.

 

[1] Dr Amit is not a medical doctor, although he works in the general practice health space. He is science Ph.D., and also holds an MBA.  In his younger days he was a naval officer

[2] This is obviously not a question asked by ASIC, and ASIC did not try to find out: ASIC has not contacted Amit

[3] to be frank this reduces to “don’t go near bank run super funds”

[4] McMaster had for years recommended Vanguard’s Australian Shares Index Funds due to the absence of commissions and the low operating costs, typically quoting articles like Why Warren Buffet Suggest Vanguard Funds. Obviously and Australian resident investor should select and Australian shares index fund to take advantage of the full dividend imputation system.

[5] Most staff were solicitors or accountants or financial planners. Many were dual or triple qualified. There were more than 50 qualified staff

[6] See the table below for computations showing how little this costs the client

The Dover Group