Protect the Wealth You’ve Built—And What Comes Next
You’ve worked hard to build something special.
Whether your concentrated stock position comes from years of company equity, a successful business exit, or an early-stage investment that took off, it’s often the result of success. But left unmanaged, that success can bring outsized risk, major tax exposure, and missed opportunities.
At Mercer Advisors, we help you manage that concentration with a financial plan that focuses on unlocking liquidity, reducing risk, and preserving long-term wealth.
What Is a Concentrated Stock Position?
A concentrated stock position occurs when a significant portion of your wealth is invested in a single security, typically through equity compensation, inheritance, or long-term holding. This might include:
- Founders or executives holding large amounts of company stock
- Long-tenured employees with accumulated restricted stock units (RSUs), stock options, or ESPPs
- Investors with low cost basis stock after a major gain
Many people don’t realize they’re overexposed until volatility strikes or until a sale triggers a sizable tax bill. A review with a financial advisor for equity compensation can help you determine your level of concentration.
Why Diversification Matters
When a lot of your wealth is tied up in one company’s stock, it can leave you more exposed than you think. Even great companies hit rough patches, and without a plan to diversify a concentrated stock position, your long-term financial goals could take a hit. It’s also common to feel personally connected to the stock, especially if it came from years of hard work or early success.
The goal isn’t to abandon a winning strategy, but to protect the value you’ve built while reducing concentration risk. A well-planned approach can help you transition to a more diversified portfolio, promoting long-term growth, stability, and financial confidence.
How We Help: Strategies That Reduce Risk and Taxes
- Unlock liquidity with concentrated stock strategies like staged sales or forward contracts.
- Use exchange funds to reduce risk and defer capital gains tax.
- Protect your concentrated stock position with puts or low-cost collars.
- Generate long-term income through covered calls or managed accounts.
- Track cost basis and model tax implications to reduce your tax bill.
- Lower income tax and support your goals with charitable trusts.
Mercer Advisors is not a law firm and does not provide legal advice to clients. All estate planning documentation preparation and other legal advice is provided through select third parties unaffiliated to Mercer Advisors, depending on the complexity of the estate, additional fees may apply. Tax preparation and tax filing services typically requires a separate fee from our investment management and planning services.
What You Can Expect From Our Advisors
Managing a concentrated stock position takes more than intuition—it takes expertise. Our advisors bring structure, objectivity, and creativity to help you make informed decisions, preserve your gains, and turn a concentrated holding into a diversified, lasting source of wealth.
Real strategy for real wealth
We treat concentrated positions not just as a challenge but as a planning opportunity. Our advisors help you manage complexity with clarity.
Tax-smart solutions built around your goals
From exchange funds to gifting strategies, we’ll show you how to reduce risk and preserve more of what you’ve built, on your terms and timeline.
Ongoing guidance, not one-time advice.
Because markets, tax laws, and life goals evolve, your plan should too. We’re here to help you navigate every aspect of your financial journey.Additional Solutions Tailored to Microsoft Employees
Managing concentrated stock is just one piece of your wealth strategy. We help you integrate that position into a broader plan that accounts for your tax exposure, investment goals, and executive-level complexity—so your financial decisions are informed, intentional, and aligned.
Concentrated Stock Checklist
Managing a concentrated stock position starts with a plan. Use this quick checklist to start assessing your current situation and understand what strategy you may want to pursue.
FAQs around Concentrated Stock
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While every situation is different, many advisors flag risk when a single position makes up more than 10–15% of your total portfolio. Holding too much of one stock can expose your financial goals to volatility, tax surprises, and missed opportunities to diversify.
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Selling shares with a low-cost basis can trigger significant capital gains tax, especially if you’ve held them long term. Timing, charitable strategies, or tax-aware sales (like staged transactions or gain harvesting) can help reduce your tax bill.
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Yes. Donating appreciated shares to a qualified charity or donor-advised fund can allow you to mitigate capital gains tax and potentially receive a charitable deduction. Gifting to family can also be a strategic way to shift future growth and reduce estate exposure.
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There are a variety of strategies available for this. Depending on your needs, options like exchange funds, variable prepaid forward contracts, or securities-based loans may allow you to unlock liquidity, reduce risk, or defer taxes while maintaining investment exposure.
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Equity compensation can create concentrated risk, unpredictable tax outcomes, and planning blind spots. Our advisors help you integrate these awards into your full financial picture so decisions around timing, diversification, and taxes support your long-term strategy.
