A North Carolina couple faced what should have been—and mostly was—a wonderful situation. The husband had gone from being a well-compensated executive who helped found a biosciences start-up company to a wealthy stockholder of that company as it matured.

However, his success also meant that almost all of the couple’s newfound wealth was held in the company’s stock. But Joshua R. Whitney, a financial advisor and tax accountant with Advantage Accounting & Tax in Fuquay-Varina, N.C., helped the couple diversify using a range of strategies and investments. That allowed them to also start enjoying their wealth.

“We took a couple that had a concentrated position of greater than 99% in one asset and created a portfolio that is now 50% concentrated in the company stock, and they have additional opportunities this year to further reduce that concentration,” Whitney said.

The couple, both in their mid-40s, became concerned about their wealth concentration after the company went public. If something ever happened to the business, their income and investments could have shrunk to nearly zero, Whitney said.

The couple wanted to diversify, but “when you are a founder of a company that goes public, you are not allowed to sell as much of the stock as you want, whenever you want,” Whitney said. “This rule guards against insider trading.

“So first we implemented a 10b5-1 executive selling plan that set out a binding agreement for what he could sell, when and at what price. We sat down with our client and the company attorney and agreed on a plan.”

The husband is still working at the company and the wife is a professional, also still working, so they have salaries coming in. But they also wanted to deal with their out-of-balance stock holdings.

Whitney took the money from the stocks they were allowed to sell and distributed it through a number of vehicles. Advantage Accounting, through its financial advisors, works with numerous pre-retirees and working professionals aged 30 to 50 who have $100,000 to $300,000 saved for retirement and want to grow that amount to provide for stability in the future.

The couple came to Whitney about five years ago after being referred to him by another client. At that time, he reviewed their assets and saw they held some 4 million shares in company stock valued at 4 cents a share. It went up some over the years, but they were not really concerned about it until the company went public and the stock skyrocketed to $19 a share.

“They were suddenly in a totally different stratosphere for planning, taxes and leaving a legacy,” Whitney said.

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