10 Questions to Ask a Wealth Manager When You Hold Concentrated Tech Equity

The equity that made you wealthy on paper is not the same thing as a plan. A founder's stock, a public-company executive's RSUs and options, a pre-IPO grant — each concentrates a large share of your net worth in a single asset whose value you don't fully control and can't always sell when you'd like. The advisor who managed a diversified portfolio well is not necessarily the one equipped to unwind a concentrated position, coordinate the tax exposure, and time it around an exit that may still be a year or two away.

There is also a well-worn default. When a bank advises on the sale of your company, its wealth management group is frequently where the proceeds land afterward — not because you ran a diligence process, but because it was the path of least resistance at a busy moment. That may turn out fine. It may also mean your largest financial decision was made by inertia. If you are comparing firms before or after a liquidity event, the right questions surface the difference quickly — between a firm that genuinely does this work and one that will simply sell your shares and bill you on the proceeds. Here are ten worth asking.

Structure & Incentives

1. Are you a fee-only fiduciary — how are you paid, and do you earn anything if I buy a particular product?

“Fiduciary” is widely claimed and frequently diluted. A fee-only fiduciary is compensated solely by you and is legally bound to act in your interest — no commissions, no product compensation, no third-party incentives. Ask the follow-up too: does the firm earn anything if you buy a particular investment, insurance policy, or annuity? Newly liquid founders and executives are approached with product pitches from every direction, and a firm with no product shelf has no reason to steer you toward any of them.

2. Am I actively choosing you — or defaulting to the bank that sold my company?

The wealth arm of the bank that ran your transaction is the convenient answer, not necessarily the right one. It is worth asking, of any firm you consider: why should my proceeds be managed here rather than anywhere else, and what would I be giving up by simply staying with the institution that advised on the deal? A firm that welcomes that question — and can answer it in terms of independence, capabilities, and cost rather than convenience — is showing you something useful.

Concentrated-Position Expertise

3. Have you actually managed concentrated single-stock positions — and how do you approach diversifying one?

There is a real difference between an advisor who invests diversified cash and one who has repeatedly unwound a concentrated position under real-world constraints — trading windows, lockups, insider status, and tax drag. Ask what a staged diversification plan would look like for your specific holding, and what they would weigh in setting the pace.

4. Which tools do you use to manage or hedge a concentrated position, and when is each appropriate?

A firm that does this work should be able to speak fluently about the trade-offs among the main approaches — a scheduled selling plan under SEC Rule 10b5-1 for insiders, exchange funds, protective collars or other hedges, charitable vehicles such as a donor-advised fund or charitable remainder trust, and simple staged selling. The right answer is not a product pitch; it is a discussion of which tool fits which situation, and the cost and lock-up trade-offs of each.

5. How do you coordinate the equity-compensation mechanics — ISOs, NQSOs, RSUs, and 83(b)?

The tax treatment diverges sharply by instrument. Incentive stock options can trigger alternative minimum tax on exercise; non-qualified options are taxed as ordinary income at exercise; RSUs are taxed as they vest; and an early-exercise grant may involve a Section 83(b) election with a strict 30-day filing window. Deferred compensation carries its own timing rules under Section 409A. You want an advisor who plans around these mechanics in advance rather than reacting to them at tax time.

6. If I have founder stock, do you know how QSBS could apply — and how to avoid losing it?

Qualified Small Business Stock under IRC Section 1202 can, when the requirements are met, exclude a substantial share of the gain on a founder's stock — and a Section 1045 rollover can preserve the benefit if you sell before the holding period is complete. The exclusion cap depends on when the stock was acquired: for stock acquired on or before July 4, 2025, the cap is the greater of $10 million or 10× the aggregate adjusted basis of the stock; for stock acquired after July 4, 2025, the cap rises to the greater of $15 million (indexed for inflation beginning after 2026) or 10× the aggregate adjusted basis. The rules are technical and easy to forfeit inadvertently, so confirm the specifics and current figures with your CPA. The point of the question is whether the advisor knows to check — and knows to involve your tax counsel early.

Perspective

7. Do you own or operate a business yourself?

Advising an owner is not the same as being one. An advisor who has built and run a business — who has met a payroll, carried real risk, and holds a concentrated stake in something they created — understands what your equity represents in a way that is difficult to learn secondhand. It is a fair question to ask directly: are you an equity owner yourself, and how does that shape the advice you give someone in my position?

Coordinating the Exit

8. Will you coordinate directly with my CPA and attorney — including multi-state tax and residency?

Nearly every one of these situations requires tax counsel and an estate attorney working in concert. Ask whether the firm quarterbacks that coordination — sitting at the table with your other advisors — or simply refers you out and leaves you to stitch the pieces together. Where you live when a liquidity event closes can also materially change the after-tax result, and that planning often has to happen well in advance to hold up. A firm that does this work will raise residency and state-tax timing before you have to ask.

9. How far before an exit should we start — and what happens in the first year after?

The most valuable planning usually happens 12 to 24 months before a sale or a major vesting event, not after. And the first year after — estimated taxes, reserve planning, diversification, giving, and disciplined monitoring — is where the plan is actually executed. A strong answer treats the exit as the midpoint of a multi-year engagement, not the finish line.

After the Exit

10. Do you retain founders and executives as long-term clients — and what does the ongoing relationship look like?

Some firms are structured to advise on the transaction and then move on. Ask what the relationship looks like in year three: who you will actually work with, how often you will meet, how performance and the plan are reported, and how they will adapt as your life and the tax landscape change.

Concentrated equity is a good problem to have and an easy one to mishandle. The questions above will not tell you which firm has the best returns — no one can promise that — but they will tell you quickly which firm has genuinely done this work, and which is improvising with your largest asset. That distinction is worth the conversation.