Corporate Exec IMAGE: Peshkov / 123RF Stock PhotoIMAGE: Peshkov /

Financial advisors that work with corporate executives and help them to diversify their company stock and options can use the following best practices to drive additional business.

One: Keep track of how much revenue you generate from executives. users report they gather on average over $500,000 in assets under management per client and can charge between $500 and $2,500 annually for equity compensation risk management and tax planning. Knowing how much business you are deriving from this niche market will help you to focus on this opportunity and execute these other tips for generating more revenue….

Two: Provide clients with an updated equity compensation risk analysis every 3 months. It only takes a couple of minutes to review their information and create an updated report. An equity compensation status update is a great reason to touch base with clients, see what’s on their mind and explore other opportunities. Even if nothing much has changed regarding their stock compensation, this exercise provides a great opportunity to gather insights and increase rapport with your valued clients. 

Three: Don’t ignore decision monitoring alerts. StockOpter monitors a client’s positions nightly and sends emails to alert advisors of diversification opportunities like grant vesting and low Insight Ratios. These alerts are meant to provoke client contact, but they can be easily discarded amid everything else advisors have on their plates. This is a mistake because these alerts signal real business opportunities. Advisors can then reach out to make clients aware of the alert and to see if they want to diversify the options with Insight Ratios below the 15% default or restricted/performance shares that have just vested. The StockOpter “My Alerts” function will let one lower or delay (for blackout periods) the Insight Ratio threshold so this alert won’t continue to be a nuisance. If the client isn’t ready to take action use the next tip to determine a lower threshold. 

Four: Use what-if Dashboards interactively with clients to establish diversification criteria. If the client is reluctant to exercise and sell their stock options when the initial Insight Ratio alert is triggered, get them to establish an alternative ratio value. Keep in mind the 15% default in StockOpter is only a “heads up” alert. Clients need to be involved in determining the Insight Ratio that will get them to exercise and sell. To do this, fire up and go to the client’s “Key Ratio” Dashboard. Ask the client for a target stock price and time horizon, enter these on the Dashboard and hit the “Applied Revised” button. This will calculate future Insight Ratios and this process will help the client to commit to a specific level of risk. After a new target Insight Ratio is established and set with the “My Alerts” function, it is just a matter of reaching out again to the client when the revised alert is triggered. 

Five: Remember to ask clients if they know anyone who would be interested in a process for maximizing the value of their employer stock and options. It’s a good practice to end every equity compensation client interaction with this question when the value of your guidance is fresh in their minds. Employees that receive company stock and options know lots of other people who could use some help to analyze, track and diversify their holdings. The StockOpter assistance approach positions your expertise and makes it very easy and natural for clients to refer you to their colleagues.

Financial advisors that use these 5 tips will be rewarded for their efforts with additional clients and assets under management.

Bill Dillhoefer is the CEO of Net Worth Strategies, Inc. and has been an authority on equity compensation diversification for over 20 years. He has helped hundreds of financial advisors to attract and assist corporate executives to diversify their company stock compensation. Connect with Bill on LinkedIn or email him here.

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