Living in the San Francisco Bay area, many of our clients are compensated with stock options and restricted stock units, as well they may have the opportunity to participate in employee stock purchase plans(ESPP).
Recently, Mark and Jane contacted First and Main Financial to help them understand their financial situation and asked us to provide scenarios as to when to sell their stock options, sell their RSUs and if they should continue participating in the ESPP program. They also wanted to know how much they should save for retirement and how to diversify their portfolio such that they were not concentrated in their employer’s stock.
We worked with Mark and Jane to gather their financial documents such as bank statements, trust documents and budget information, which they uploaded to our secure financial planning software, eMoney Advisor. They were also able to easily connect their bank and brokerage accounts to eMoney so we could see their current finances. We produced a base case scenario for Mark and Jane, then created multiple “What If” scenarios that included looking at funding various retirement plans to maximize the value of their retirement assets, identifying when best to convert and withdraw from retirement funds to minimize taxes, and figuring out the impact of retiring earlier or later.
Within each of these scenarios, we projected a “probability of success” of reaching age 90 with enough assets to live. While the probability of success was 100% in each scenario, we were still able to show them the positive or negative impact of these various scenarios on their total portfolio assets and net worth. In addition to reviewing their finances, we recommended that Mark and Jane start funding a 529 to cover the private school and college education costs for their 5-year old son. We also reviewed their insurance (Life, Disability, Auto, Renters/Home, Medical, etc.) to assess if they maintained enough coverage and suggested they get a quote for an umbrella policy since their net worth was significant.
After presenting the financial plan to Mark and Jane, they asked First and Main Financial to manage their assets. We offer a tiered fee schedule for our clients which, compared to the industry averages usually charged by other firms, is considered a good deal. We also provide all clients with quality and individual attention as well as complementary guidance on existing 401(K) money.
If you are looking for some financial guidance, whether it be for a one time financial plan or continuing advice on your investments, we invite you to meet with the First and Main Financial advisors for a free consultation. We work with a variety of clients and would be more than happy to sit down with you, assess your current financial situation, and review with you our services and products to help you navigate your own financial future.