How We Serve: Corporate Executives

Over the years, we have had the privilege to serve a wide range of corporate executives: CEOs, CFOs, COOs, CMOs, Founders, Directors, and VPs, to name a few.

These clients have unique long-term goals, resources, and values, but we continue to see one common denominator: all are extremely busy leading their companies forward, leaving little time to focus on their personal wealth management strategy.

In this article, we’ll share a bit about how we serve this unique group of clients and the planning challenges (and opportunities) that come with executive compensation. As always, we invite you to connect with our team to discuss any of the ideas covered.

It Starts With Planning

For every client that we serve, our work begins by understanding their unique financial life. What does their personal balance sheet look like? What milestones are on their horizon? What is their tolerance for market risk? What are the key drivers of income, and what does their overall cash flow look like?

We ask these same types of questions when working with corporate executives but tend to find unique complexities when it comes to their compensation and cash flow. For many executives, it’s not uncommon for them to be managing four or five “asset buckets” at any given time:

Investment portfolio – Brokerage accounts, Roth or Traditional IRAs from previous employers, inherited IRAs, etc.

Company-Sponsored 401(k)

Benefit Programs – Deferred Compensation, ESOPs, Capital Accounts, or Pensions

Equity compensation – Restricted stock units (RSUs), Non-qualified stock options (NSOs), Incentive stock options (ISOs), Performance shares, etc.

If you are an executive, these individual “buckets” make up your total portfolio, and it’s important to understand how changes in one area may change your risk and return profile of the whole.

At SWP, our central premise is to provide comprehensive guidance that covers all aspects of your wealth. In practice, this means considering how your annual tax bill would be impacted by selling NSOs, or how changes to your deferred compensation plan should impact your 401(k) asset allocation. Through this work, we provide value (both in dollars and time) to the executives that we serve, and for me, managing this type of complexity is one of the most enjoyable aspects of our work.

Managing Concentration Risk

While the composition of your financial life is likely complex, you probably also face unique risks. One of the biggest risks is “concentration risk.”

Concentration risk can occur anytime your financial well-being is highly exposed to just one company, sector, or asset class. As an executive, it is especially easy to encounter concentration risk because your salary, equity compensation, and benefits package are all tied to your company.

The past year and a half have been a good reminder that unforeseen events can, and do, impact the financial standing of successful companies. Accordingly, we work with corporate executives to identify concentration risk within their portfolio and reduce that risk. For many, this may involve identifying a maximum allocation to their company’s stock or working to sell company stock on a predefined schedule.

In doing so, we are mindful that selling company stock is rarely a simple or straightforward decision for executives. For many executives, there are factors that encourage them to hold more stock than would otherwise be advisable, including:

  • The desire to be a “team player” by holding shares rather than selling
  • Their understanding of their own company, which can lead to familiarity bias (accepting greater risk in a known entity rather than a reduced risk in lesser-known entities)
  • Uncertainty around the tax implications of selling shares or exercising options

Ultimately, the decision to re-allocate company stock is up to you. However, we can help define the quantity of concentration risk you face and the alternatives that may exist.

Company Benefits and 401(k) Decisions

Lastly, it’s important to note that many corporate executives we serve also oversee their company’s 401(k) retirement plan. Our team is uniquely qualified in the management of these plans, and this provides another layer of support and guidance for the executives we serve. Ultimately, our objective is to be a one-stop-shop for executives and their wealth management needs, and the 401(k) management portion of our work is a critical piece of delivering on that objective.

Closing Thoughts

We hope this article has provided a look at how we serve the unique needs of corporate executives. If you are a corporate executive looking for a more comprehensive approach to wealth management, we invite you to connect with our team.

This article contains general information that is not suitable for everyone. The information contained herein should not be constructed as personalized investment advice. Reading or utilizing this information does not create an advisory relationship. An advisory relationship can be established only after the following two events have been completed (1) our thorough review with you of all the relevant facts pertaining to a potential engagement; and (2) the execution of a Client Advisory Agreement. There is no guarantee that the views and opinions expressed in this article will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

Strategic Wealth Partners (‘SWP’) is an SEC registered investment advisor with its principal place of business in the State of Illinois. The brochure is limited to the dissemination of general information pertaining to its investment advisory services, views on the market, and investment philosophy. Any subsequent, direct communication by SWP with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of SWP, please contact SWP or refer to the Investment Advisor Public Disclosure website (http://www.adviserinfo.sec.gov).

For additional information about SWP, including fees and services, send for our disclosure brochure as set forth on Form ADV from SWP using the contact information herein. Please read the disclosure brochure carefully before you invest or send money (http://www.stratwealth.com/legal).

Investments
Is It Still A Good Time For You To Invest?
People often ask me, “is now the right time to get into the market?” If I had a crystal ball that told me when to buy and when to sell, I probably would not be writing this piece! With the highest inflation numbers since the 1980s, concerns about an economy potentially in recession, and the most prolonged downturn in stocks since the Great Financial Crisis, there is no question that investors have been challenged this year. The good news is that there are always opportunities for long-term investors with the right plan. Whether you are an experienced investor, have recently come into cash, or are new to the financial markets, below I discuss some things to consider when asking if now is the right time to invest.
Read More
Investments
Retiring in a Volatile Market
This week has been another extremely turbulent one in the stock market. While it is never comforting to see large, red numbers, volatility can be even more uncomfortable for recent retirees or those considering retirement. A colleague of mine recently told me that he has seen more of his clients retire in the last two years than in his first ten years of working at SWP. This got me thinking a lot about the notion of retirement. Retirement is a huge life event and adding volatile markets can compound the feeling of uncertainty. In this article, I will share some of the concepts we have been discussing with our clients.
Read More
News
Strategic Wealth Partners Ranked In Milwaukee Business Journal’s Investment Management Firms List
Strategic Wealth Partners is proud to be listed in the Milwaukee Business Journal’s Investment Management Firms ranking. The list is ranked by firm assets under management from December 31, 2021. “We are so pleased to be included in this list of the largest investment advisors in the Milwaukee area. We first entered the Milwaukee market in 2018 because we saw tremendous potential to combine forces with some outstanding professionals,” says Principal and Co-Founder Neal Price. “Kathy Klein, Joe Thompson, and the entire Milwaukee team are best-in-class. We are excited to expand our presence and become the go-to firm for comprehensive wealth management services in the Milwaukee area.” “Our success comes from a solid and loyal client base who believes in our personalized solutions. Our work on behalf of our clients is far-reaching, but it all comes down to our unique process that is client focused, manages complexity, delivers simplicity, and guides our clients to their goals,” states Wealth Advisor Kathy Klein. Strategic Wealth Partners is an independently managed wealth management firm that has been partnering with clients since 2008 in Deerfield, IL, and since 2018 in Milwaukee, WI. For more information on services, please visit www.stratwealth.com.
Read More