How Mercer Advisors Helps Holders of Concentrated Stock
Managing concentrated wealth takes more than sell-or-hold decisions. We help you explore tax-smart strategies, unlock liquidity, and turn your concentrated stock into a strategy tailored to your needs, all guided by a dedicated advisor backed by a unified team.
Various clients have given me many reasons why they are holding a concentrated position. But none of them have convinced me that it’s a good idea. I understand why it’s hard to diversify a position, but ultimately, I believe it’s the right thing to do and I’m grateful for the trust that my clients place in me to guide them through this process.
Case Study: From $9M in Stock to a Lifetime Wealth Plan
At Mercer Advisors, we help clients turn their big financial moments into the foundation of a comprehensive financial life, designed around their needs and goals.
Here’s just one example of how we can help professionals navigate large stock positions, turning $9 million in company stock into a full-scale plan designed to amplify opportunity, reduce risk, optimize tax savings, and set up a tax-smart estate plan.
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Jeff, a Senior Engineer at a publicly traded tech firm for more than a decade, has navigated the complexities of wealth accumulation through his ESPP and 401(k), amassing a $9 million position in company stock and an additional $3 million in retirement savings.
Unprecedented market volatility resulted in dramatic swings in stock price, causing Jeff’s portfolio to fluctuate wildly. He lost over $1.3 million in value at one point before rebounding to a peak of over $9 million.
Residing in Fort Collins, Colo., with his wife Lauren and their two children, Jeff’s commitment to his career was balanced by his aspirations for a more relaxed future. The market’s rollercoaster ride and a desire for change led him to consider reducing his work pace, possibly shifting to consulting or philanthropy.
In response to these challenges, Jeff and Lauren turned to Mercer Advisors, a family office that provided them with not just a wealth advisor, but also a dedicated in-house CPA and estate planning attorney. This integrated team approach helped ensure all aspects of their financial life were managed under one roof, including the option for Mercer Advisors to handle their tax filings.
Mercer Advisors advised Jeff to diversify $6 million out of his $9 million company stock position, aiming to immediately reduce his portfolio’s exposure to under 25%. This move was a key part of the couple’s plan to achieve financial independence, allowing Jeff to work on his own terms.
Specific tax lot sales were recommended, and a 10b5-1 plan was established for systematic future sales, ensuring compliance with insider trading regulations. Additionally, Jeff and Lauren are considering an exchange fund to further diversify Jeff’s concentrated stock position without immediate tax consequences.
The couple’s financial strategy, managed by the in-house team at Mercer Advisors, included leveraging the sunsetting federal estate tax exemption before its potentially significant reduction post-2025. This foresight was crucial in maximizing their children’s inheritance.
Jeff and Lauren also made a significant charitable contribution, setting up a Donor Advised Fund (DAF) with a $1 million donation, chosen from their lowest basis company stock. This not only provided tax savings but also aligned with their philanthropic goals.
Their diversified investment portfolio now balances the remaining company stock with a robust, tax-efficient nest egg. With a clear plan for each asset and a strategy for growth and preservation, Jeff and Lauren are well-prepared for their financial future and the legacy they will leave for their family.
Looking ahead to post-retirement when Jeff is no longer bound by his company’s trading restrictions, they are exploring the use of derivatives and options strategies. This proactive planning is part of their ongoing strategy to grow and preserve their wealth, helping to ensure a secure and fulfilling future with Mercer Advisors as their family office partner.
This case study is hypothetical and intended for illustrative purposes only. It does not represent an actual client or an actual client’s experience but rather is meant to provide an example of the process and methodology at Mercer Advisors. This case study should not be construed by a client or prospective client as a guarantee that they will experience a certain level of results if Mercer Advisors is engaged, or continues to be engaged, to provide investment advisory services. An individual’s experience may vary based on a client’s individual circumstances. There can be no assurance that Mercer Advisors will be able to achieve similar results in comparable situations. No portion of this case study is to be interpreted as a testimonial or endorsement of Mercer Advisors’ investment advisory services, and there is no way for Mercer Advisors to ascertain whether the hypothetical client(s) would have been satisfied with their results. The information contained herein should not be construed as personal investment advice. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals may materially alter the performance and results of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client’s investment portfolio. Diversification and asset allocation do not ensure a profit or protect against a loss.
Mercer Advisors is neither a law firm, nor a certified public accounting firm, and no portion of its services should be construed as legal or accounting advice. All estate planning documentation preparation and other legal advice is provided through select third parties unrelated to Mercer Advisors. Tax preparation and tax filing are a separate fee from our investment management and planning services.
Specialized Services and Concentrated Stock Strategies
- Concentrated Equity Risk Mapping: Visualizes how single-stock exposure impacts overall net worth.
- Tax-Efficient Equity Liquidation Strategy: Minimizes taxes while preserving upside during stock sales.
- Behavioral Coaching for Diversification Decisions: Helps overcome emotional barriers to selling company stock.
- Tax & Estate Coordination: Aligns equity with gifting, trusts, and legacy planning.
- Portfolio Complement Design: Builds portfolios that offset concentrated stock exposure.
- IPO & Liquidity Event Readiness: Prepares for financial impact of IPO or acquisition.
- Equity-Focused Retirement Modeling: Integrates equity into long-term income and retirement plans.
A Family Office for Your Family
We’ve adapted the sophisticated, time-tested strategies used by ultra-high-net-worth individuals to help more families take control of their financial future.
A unified in-house team
of planners, investors, accountants, and estate strategists that designs — and executes — your financial plan.
A hand-picked advisor
who is focused on serving you, not on finding new clients.
An institutional-grade portfolio
personalized to you and managed by a team of 100+ investment professionals, not just one advisor.
A boutique fiduciary with national strength
that combines intimate service and sophisticated capability, and only acts in your best interest.
Mercer Advisors offers the strength of a large national firm with the personal touch you expect from a local office.
TRUST WE HAVE EARNED
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Helping families like yours for over 40 years and counting.
Frequently Asked Questions
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You don’t have to sell everything. Understanding your exposure helps you protect what you’ve earned. Our investment team designs portfolios that complement your equity, not compete with it.
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Actually, the people who come to us are often thriving; they just want to make sure their success is sustainable. We act only in your best interests, with the scale to support complex equity strategies.
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We believe in simple, transparent fees. As a fee-based fiduciary, we can remain focused on doing what’s best for you, not commissions.
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We specialize in tax-smart strategies for RSUs, ESPPs, and options—whatever equity your company offers—helping you plan, not just react. Our in-house team coordinates every move to help minimize surprises.
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You could, but concentrated stock can swing fast. We help you map out scenarios so you can act with intention, not urgency.
“I don’t have time to manage all this.” That’s exactly why we exist. Your advisor handles complexity, so you can focus on what matters most.
