Case Study: Corporate Executive

Fortune 500 Executive who is nearing retirement age and planning to leave the company within 5 years


After a long career as a corporate executive, our client had accumulated a large amount of company stock that she had received as part of her annual compensation package. These restricted stock (RSUs) and stock grants now comprised a large percentage of her overall wealth. As she began contemplating her lifestyle in retirement, she became concerned about the lack of diversification in her investment portfolio and the large tax liability due to the low cost basis of the stock.

The Solution:

  • Devise a tax efficient investment strategy that helps to reduce concentration risk
  • Utilize an exchange fund designed to create diversification for investors holding concentrated positions while also helping to reduce the tax liability associated with a low cost basis stock sale
  • Implement an investment strategy to create current income for the client and help offset her tax bills

How We Helped:

  • Repositioned the portfolio to increase the diversification to help reduce the volatility of her investments
  • Reduced the tax liability on individual shares by swapping stock into an exchange fund
  • Successfully created an additional source of income
  • Significantly lowered the concentration risk of the client's investment portfolio helping her to feel more confident about being able to live comfortably in retirement

This case study is hypothetical and for discussion purposes only. It is 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. Asset allocation and diversification are investment methods used to help manage risk. They do not guarantee investment returns or eliminate risk of loss including in a declining market. Wells Fargo Advisors Financial Network and Seventy2 Capital are not legal or tax advisors. You should consult with your attorney, accountant and/or estate planner before taking any action. CAR-0820-00265