This is another installment in a series of articles describing successful equity compensation advisors. The intent is to provide ideas and inspiration to financial advisors who are interested in growing their practices by assisting executives with equity compensation.
David G. Strege, CFP, CFA is a partner with Syverson, Strege and Company located in West Des Moines, Iowa. This “fee only” financial services firm has been in business for 15 years and manages $300 million in assets. Syverson-Strege serves a high net worth clientele consisting of 40% executives. Fifteen of David’s 30 years in financial services have been working with equity compensation. David is a member of the Financial Planning Association, the Institute of CFAs and NAPFA (National Association of Personal Financial Advisors).
StockOpter: How did you get into equity compensation planning?
David: In the late 1990’s our firm acquired some clients with employee stock options so we realized immediately that this represented an opportunity to specialize in a growing and lucrative niche.
StockOpter: How did you go about developing your equity compensation planning skills?
David: There weren’t many sources of equity compensation planning information at the time so I learned using a combination of industry resources and by working with clients. In 1999 I wrote an in-depth article on stock based compensation planning.
StockOpter: What is your approach to working with executives with equity compensation?
David: Our firm uses a team-based interactive process. We model a variety of exercise and sell strategies for our clients that serve as a framework for discussing their holdings and making decisions. We often propose exercising stock options when the current stock price is 3x greater than the grant price or when the grant is within one year of expiration. The firm also helps high level executives subject to the Section 16 provision to establish 10b5-1 trading programs.
StockOpter: What planning strategies are working right now?
David: We used to do a lot of ISO planning to create tax efficient strategies for these grants, but this has decreased over the years because ISOs are not as common. However, since many of our clients are now receiving restricted stock grants that create taxable events upon vesting, we’ve been using Charitable Giving Strategies as a means of reducing the tax liability in years when large swings in income is generated. I’ve provided the StockOpter University with an article describing the mechanics of these strategies.
StockOpter: How do you prospect for clients with equity compensation?
David: Referrals are by far the best way to secure new clients. You do a good job for them and they are happy to refer. One of the good things about equity compensation is that everyone who receives it knows other people who also have it.
StockOpter: Do you have any other advice for advisors who are trying to grow their practices using equity compensation?
David: Conducting education and assistance programs at local companies has worked for us in the past. This approach can generate fees and gets you in front of a lot of executives, but it now requires a longer and more involved sales process. There are many more players in the market than there used to be and there are fewer individuals receiving equity compensation. Consequently, if you are targeting this market you need to be knowledgeable, effective and efficient. This is easier said than done but StockOpter helps.
David can be reached at: 515-225-6000 x125 or firstname.lastname@example.org.