Episode summary
The Planning Opportunities Hidden in High-Net-Worth Conversations
Summary
High-net-worth clients are asking more about concentration risk, diversification, taxes, and philanthropy, especially after several years of strong market returns. Tara Popernik says advisors should not treat concentrated stock as a single-issue problem: the right response depends on the client’s goals, whether that is liquidity, risk reduction, tax deferral, or charitable intent.
She outlines several ways advisors can respond to concentrated positions, including securities-backed lines of credit for liquidity, diversification or hedging for risk reduction, exchange funds and opportunity zones for tax deferral, and tax-loss harvesting portfolios to help offset gains. If the client wants to give, she points to donating stock directly or using donor-advised funds.
Popernik also argues that advisors are missing an easy planning conversation by avoiding philanthropy. She cites a study showing 40% of advisors think clients may be uncomfortable discussing it, while 81% of clients said they would not feel uncomfortable if asked. Her broader message is that advisors should engage the next generation, involve inheritors in planning, and coordinate outside specialists when needed so they can become the quarterback of the client’s full financial picture.
Key takeaways
- Tara Popernik says concentrated stock should be addressed with a goals-based plan, not just automatic diversification.
- She says advisors can use securities-backed lines of credit, hedging, exchange funds, opportunity zones, and tax-loss harvesting depending on the client’s objective.
- Popernik says advisors are overestimating discomfort around philanthropy: 40% of advisors worry about it, but 81% of clients said they would not mind being asked.
- She says the great wealth transfer makes next-generation engagement a major missed opportunity for deepening relationships.
- Popernik says advisors can add value by coordinating outside help, such as bill pay or art appraisal, and acting as the quarterback for the household.
Notable quotes
“the questions we're getting from clients are around concentration within their portfolio, diversification, taxes, and how does philanthropy figure into their overall plan”
“the adviser needs to do is really understand the client's goals and how that concentrated position fits into their overall portfolio and within their overall strategy”
“for a client looking for liquidity, we may pursue um an avenue of a securities backline of credit”
“40% of adviserss believe it might make clients uncomfortable to bring up philanthropy but they also surveyed clients and 81% of clients said no they would not feel uncomfortable”
“engaging with that next generation of your client's family”
How the episode opens
Hi everyone and welcome to this wealth management fast chat. I'm Shannon Rosik, director of content solutions, and I am thrilled to be joined by Tara Paernick, executive vice president of wealth planning at LPL Financial. And today we're talking about the evolving needs of high netw worth clients, the planning conversations advisors should be having, and where there may be untapped opportunities to deliver more value. So, Tara, thank you so much for joining me.
Happy to be here. Thanks for having me. — So, I want to get right into the hard-hitting questions. What topics are clients asking their adviserss about today?
Look, I think in part because we've had robust market returns over the last several years, a lot of the questions we're getting from clients are around concentration within their portfolio, diversification, taxes, and how does philanthropy figure into their overall plan, especially this time of year as g it's giving season. I think one area that's particularly interesting especially for clients who've built significant wealth through company stock is managing those concentrated positions and there are a lot of considerations beyond simply diversifying a portfolio. Right.
So can you provide more detail on concentrated stock strategies?
Sure. So first thing the adviser needs to do is really understand the client's goals and how that concentrated position fits into their overall portfolio and within their overall strategy. The second thing is what are they really looking for and often strategies might be combined to accomplish multiple goals.
So for a client looking for liquidity, we may pursue um an avenue of a securities backline of credit. For a client pursuing risk reduction, you can simply diversify. you you can hedge.
Um if you want to reduce risk and defer taxes, um you could look towards deferral strategies such as an exchange fund or early next year the opportunity zone program comes online.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- ultra-high-net-worth planning
- philanthropy
- concentrated stock
- advisor client conversations
- wealth planning takeaways
Companies and tickers mentioned
- LPL
- LPL Financial
Watch the episode
Watch “The Planning Opportunities Hidden in High-Net-Worth Conversations” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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