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Feb 3, 2025
The tech industry is unique … to say the least. And the wealth management needs of the executives and entrepreneurs within the tech industry are no less nuanced. Whether it’s the majority of your compensation coming in the form of RSUs or the desire to join former colleagues in their new start-up, it’s critical that successful tech professionals find and work with wealth managers who truly understand their industry, their specific compensation structures, and can help them accomplish their vision for their wealth.
To be sure, there is no shortage of wealth management firms to choose from (more than 15,000 RIAs alone). However, the list of wealth management firms that offer a deep understanding of the tech industry and truly specialize in working with tech executives is rather short. To help find those firms and separate the ones that talk a big game from those that are deeply experienced in working with tech professionals, I offer the following four questions every tech executive should ask:
Does the firm specialize in working with people like you?
As the title of this article states, the most fundamental question to ask is whether a firm specializes in working with clients like you. That needs to be a core part of their business. A wealth management firm must be intimately familiar with the hyper-nuanced dynamics of working with tech executives and entrepreneurs. For example, does your compensation package include a significant number of RSUs? If so, those come with a specific risk / reward profile and tax consequences. It’s critical that a wealth manager is experienced in how to plan for and leverage RSUs, stock options, and ESPPs.
Beyond RSUs, ask whether the firm has familiarity with the type of benefits package you have. Are they able to provide guidance on how to fully leverage those benefits? Also, are there “blackout windows” for your specific company, which in many cases are tied to role/seniority?
Don’t forget to ensure that a firm is able to connect with you when and how works best for you. Is that in-person, virtually, a hybrid of both? Find a firm that literally meets you where you are.
Does the firm understand your stage of life and career?
The length and trajectory of a career in tech is very different from other industries. While someone in their mid-40s might be “mid-career” in any other industry, in tech that can represent the zenith of a career. That being the case, a wealth management firm needs to understand that a 45-year-old tech executive isn’t necessarily going to work another 20 years, but rather may be focused on getting to the “work-optional” phase of life. That requires a whole different framework for wealth planning.
Similarly, someone in their early 30s in any other field is likely only focused on putting money into a 401k plan (hopefully). In the tech industry, someone in their 30s may have accumulated enough wealth to leverage more sophisticated wealth strategies, specifically alternative investments like exchange funds. A wealth manager needs to have visibility into and experience with this accelerated career and wealth accumulation and plan accordingly.
Is the firm experienced in working with clients at your level of wealth?
In the tech industry, there is wealth and there is WEALTH. A tech professional with a net worth of $1 million is certainly doing well, but the level of service that person needs from a wealth management firm is vastly different from someone with a net worth of $50 or $100 million or more. So, knowing your net worth (and how that is likely to grow), ask whether the wealth management firm you are considering is experienced with working with clients with your specific level of wealth. There are firms out there that serve clients with all different ranges of assets – $1 million, $5 to $20 million, upward of $50 million – so you can find a firm that’s right for your needs.
For example, you may now be in a financial position where allocating to more alternative investments makes sense in order to have non-correlated assets relative to your income. The right wealth manager will know that. Or perhaps you are at the stage where you and your family would benefit from a suite of holistic family office services. Not every wealth management firm can provide that (very few actually do), so ensure that the firms you are considering have the appropriate capabilities for your specific needs.
What is the firm’s domain expertise?
Finally, ensure that the firm(s) you are considering are able to provide the types of services that you need today and in the future. Ask them, “What’s in scope?” How and why are assets managed? What is their approach to creating a comprehensive financial plan? Does that include sophisticated tax planning? Does the firm provide advanced estate planning for high-net-worth and ultra-high-net-worth clients? What does that entail? These are critical questions to ask to ensure that a wealth management firm can meet your needs today and long into the future.
Contact us to learn more about finding the right wealth management firm for you and your family.
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Alex Katz
President