A Park City Wealth Advisors Case Study:
We recently worked with a senior executive at Meta who found himself in a common but precarious position. After years of dedicated service, he had accumulated substantial wealth through restricted stock units (RSUs) in his employer’s company.
With the stock up nearly 40%+ in the past year, he was understandably attached to his position. The company had been good to him, and he felt a deep sense of loyalty. At this point, his vested and unvested shares represented enough wealth for an extremely comfortable retirement in just one year.
Despite our recommendations to implement 10b5-1 plans and exercise strategic diversification during open trading windows, he resisted. After all, his entire wealth had been built through this single stock—why change a winning formula?
This is where our role as advisors becomes critical. While we acknowledge the emotional connection to an employer and its stock, we must highlight the very real concentration risk this represents.
Consider the cautionary tale of another client who was heavily invested in Silicon Valley Bank. They felt confident in the company’s future.. you know the rest. Their retirement timeline shifted from “ready now” to “needing to work another decade.”
The harsh reality: Concentration is indeed an excellent wealth-building tool on the way up, but it’s also the fastest path to financial devastation on the way down ⬇️.
True financial security isn’t just about building wealth—it’s about protecting it once you have it.
💻 The new market reality: Today’s stocks don’t trade like they used to. Social media has dramatically changed market dynamics over the past five years. Information spreads instantaneously, and when negative momentum begins, the path downward can be swift and brutal. Once that downward train 🚊 starts rolling, it’s incredibly difficult to stop.
Don’t let preconceived notions about potential tax liabilities or optimistic predictions about your company’s stock prevent you from having crucial conversations about protection strategies. Creating a financial “landing zone” for yourself and your family should take priority.
This specialized approach to de-risking concentrated positions is something we prioritize with our clients. Every situation is unique, but what remains consistent is the importance of starting these conversations before it’s too late.
