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Managing Concentrated Stock Wealth: An Adviser's Guide to Building Customized Solutions

ISBN: 978-1-57660-177-8
256 pages
June 2005
Managing Concentrated Stock Wealth: An Adviser
An old adage cautions against putting all of your eggs in a single basket. Yet many investors maintain a significant portion of their wealth in one stock, as a result of executive compensation packages, stock inheritances, IPOs, or corporate buyouts, leaving their portfolio in a dangerous position.

Tim Kochis, a recognized leader in financial planning, has compiled more than fifteen strategies for managing concentrated stock wealth. The book explores the key barriers to addressing concentration risk—securities law, taxes, psychological resistance—that clients and their advisers must overcome to successfully manage concentrated stock wealth.

This book fills a void in the adviser's arsenal and lays out the options available to clients. Using examples drawn from decades of work, Tim Kochis shows not only what can be done, but also what actually works—and even how concentration can present unique opportunities for preserving and growing wealth.
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Introduction.

PART I. SALES.

1
Constraints on Managing Concentration Risk.
2 Sale and Diversification.
3 Coordinating Long Shares With Stock Options.
4 Diversification Sales and Deferred-Compensation Plans.
5 An Out for Insiders.
6 Restricted Stock: Tackling Temptation.

PART II. GIFTS.
7 Gifts to Family.
8 Nonqualified Stock Options: Gifts to Family.
9 Gifts to Charity.
10 Charitable Trusts.
11 Nonqualified Stock Options: Gifts to Charity.

PART III. RETENTION.
12 Margin: An Acquired Taste.
13 Managing Concentration Through an Index Proxy.
14 Exchange Funds.
15 Derivatives and Hedges: Buying Time.
16 Powers of Concentration.

Afterword.
Index.
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Tim Kochis, JD, MBA, CFP, is CEO of Kochis Fitz Wealth Management in San Francisco. Before forming Kochis Fitz in 1991, he was national director of personal financial planning for Deloitte & Touche and, before that, for Bank of America. Kochis serves on the boards of several industry organizations and has chaired the CFP Board of Standards, the Foundation for Financial Planning, and the international Financial Planning Standards Board.
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"Placing a premium on knowing and serving the client's goals, this excellent book opens new vistas of creativity and opportunity for the thoughtful planning professional."
- Estate Planning

"If you have even one client with a concentrated stock position, this is a must-read. Kochis combines decades of experience, exceptional technical knowledge, and a gift for writing to create an invaluable guide to this thorny issue."
- Harold Evensky
Chairman, Evensky & Katz

"Finally someone has prepared the comprehensive guide to handling concentrated stock positions.  Tim Kochis has long been a leader in the advisory community and built his business at ground zero of the technology stock market boom. He and his partners were forced to develop an unmatched expertise in helping clients manage large, single stock positions resulting from their employment. In this book, he shares his vast experience and insights with other advisors."
- Mark Hurley
CEO, Undiscovered Managers


"Anyone who works with clients with inherited wealth or corporate executives should keep this book prominently displayed on their desk.  I have been referring to it more frequently than the Yellow Pages!"
- Ross Levin, CFP®
President, Accredited Investors, Inc.
Author, The Wealth Management Index


"If you can't get Tim Kochis to advise you on your concentrated positions, buy this book for your adviser."
- Richard A. Kashnow, PhD
Former Chairman and CEO, Raychem
Nonexecutive Chairman, Komag


"Tim Kochis has another hit with his latest book, Managing Concentrated Stock Wealth.  Advisers dealing with highly compensated executives will find this book to be an invaluable resource as they deal with the complex issues involved with concentrated stock positions."
- Tom L. Potts
Professor of Finance and FSP Program Director,
Baylor University Hankamer School of Business


"Tim Kochis is the planner's planner, and Managing Concentrated Stock Wealth is essential reading for any advisor helping clients navigate the return, risk, tax, legal, charitable, and psychological issues that come with concentrated wealth. An indispensable book."
- Paul Solli
Partner, Aperio Group LLC

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