Our clients count on us to be there when they need us. Whether your concerns center on an investment strategy to get you where you want to be, selling a business, leaving a legacy, or planning for future generations, you can rely on us to help you to develop the right solutions for you.
We received a referral for a new client who was a college professor, and his retirement savings were in a qualified retirement plan (QRP) with his employer. One of the challenges the client faced was that he was working with multiple advisors, including those outside his QRP, which resulted in there being gaps between key areas of his financial life, such as his retirement plan, estate plan, insurance coverages, real estate holdings, and bank accounts. Our new client needed a more advanced level of advice and a strategy to be put in place that would generate a predictable cash flow during retirement that would replace his paycheck.
With people living longer and traditional pensions in decline, the burden of creating an income over the course of retirement has increasingly become an individual responsibility. It’s also important for investors to determine the amount of money they will need to live their desired retirement lifestyle. This should include factoring in inflation and medical expenses. We worked with our new client to review and consider all the options he had available in his QRP to generate income during retirement. This included developing a retirement cash-flow analysis that provided a snapshot of his estimated income based on his current financial situation. It was also vital to develop a more comprehensive, cohesive investment plan to eliminate the gaps between key areas of his financial life, in addition to performing a Social Security analysis. The plan was also designed with flexibility built in for adjustments to be made as appropriate to account for unexpected life event or changing priorities.
Corporate executives often accumulate a sizable portion of employer stock through stock purchase plans, stock options, company stock in retirement plans and other employee benefit programs.
A client who is a corporate executive at a Fortune 500 company needed help dealing with a concentrated stock position. She requested our assistance in determining whether the stock was restricted, control or both; assessing its holding period and calculating how many shares she could sell.
Large, single-stock positions can be a powerful means of creating wealth, but without a proper comprehensive plan, these can also be a very risky way to maintain it. We helped our client explore a range of strategies to help protect and provide liquidity for the concentrated equity position within the context of her overall investment plan.
Our solution was to help the client set up a 10b5-1 plan during an open window when she did not possess material non-public information. The 10b5-1 plan offered a straightforward way for the executive to manage her shares while retaining an affirmative defense against insider trading and making the most of her equity compensation benefits. It also maintained alignment with her existing retirement, estate and wealth transfer goals while offsetting the concentrated stock risk.
A client’s family member referred a tech entrepreneur to us who was getting ready to sell his business and needed help preparing for this significant liquidity event. He wanted to be able to leave the business on his terms and at an optimal time in his life. The owner understood the importance of obtaining an accurate valuation and employing strategies to maximize the value of the business, as well as planning for the significant tax implications.
We helped our new business owner client look at the transaction with special consideration given to personal income and tax implications. We drew on our experience for guidance with the valuation, sale and other opportunities he was weighing including selling to an ESOP. Our planning process started with personal and business goals, as well as an assessment of the owner’s financial readiness. We subsequently identified exit options best aligned for his situation. We developed an investment plan and diversified well balanced allocation tailored to his objectives to grow his family’s new wealth in a socially responsible way and to provide secure income while he was finding his next opportunity.
We also developed a comprehensive estate plan strategy to ensure that the wealth he worked so hard for would transfer to his family in the most efficient way.
We received a referral for a new female client who was in her late 50’s and going through a divorce. Her husband had handled the finances in the family, so she had only limited experience dealing with decisions related to wealth management. Our new client was in need of a strategy that was suited to her objectives, not the goals of her former spouse.
An unexpected life event such as a divorce can affect everything from tax status to monthly and yearly income. We worked with our new client to review her divorce decree, how assets were legally viewed, and the details of her former spouse’s financial responsibility related to alimony, marital debt, healthcare coverage, and milestones related to various other financial responsibilities. This included identifying the need to update beneficiary designations on life insurance and retirement plans. It was also vital to help update the client’s estate plan. Within the context of the big picture, we developed a comprehensive investment plan designed to enable her to live comfortably in the years ahead.
We helped with the investment plan and allocation her risks and developed a plan for income now and in the future when her alimony income ended.
These case studies are hypothetical and for discussion purposes only. They not intended to represent any specific return, yield or investment. Individual experiences referenced above may not reflect the future experience of any one client. The planning process discussed may not be suitable for your personal situation, even if it is similar to the example presented. Past performance is no guarantee of future results. Investing involves risk including the possible loss of principal.
Wells Fargo Advisors is not a legal or tax advisor. You should consult with your attorney, accountant and/or estate planner before taking any action.
Any estate plan should be reviewed by an attorney who specializes in estate planning and is licensed to practice law in your state.