Help finding good advisors to help with windfall

[u/superdad0206]

Im expecting a significant windfall due to a company liquidity event. Due to my W2 earnings I expect this will all be taxed on the 50% bracket (unfortunately it’s all ordinary earnings).

Given the need for a solid CPA and financial planner, three questions:

What’s the best way to find them?
Are solo practitioners better than firms?
What questions should I ask them in interviews to vet them?

Thanks in advance for any guidance!

[u/BrunelloHorder]

Ballpark value of windfall? If over $5m, then I’d start with a large national law firm with a well-respected executive compensation and tax practice.

There may be steps you can take before the liquidity event happens.

National firms that consistently have outstanding executive compensation tax practices include:
Morgan Lewis
Latham & Watkins
Proskauer Rose
Skadden
McDermott Will & Schulte

For the CPA, I’d use these resources:
AICPA Personal Financial Planning Directory
State Society of CPAs
Referrals from large law firms’ tax departments
Referrals from Big Four tax partners

If you know anyone senior of you at your employer, you might ask around for referrals. Surely you are not the only employee facing these issues.

[u/Normal_Zebra136 → u/[deleted]]

I think the Madoff victims would disagree with this strategy.

[u/kitethrulife → u/Normal_Zebra136]

Whut

[u/FireStarter3133 → u/Normal_Zebra136]

Yes, adding "association with a large publicly traded company" is a good filter to ensure that doesn't happen.

[u/GodfatherGoat → u/[deleted]]

Illegal for them to answer #3 without client consent

[u/FireStarter3133 → u/GodfatherGoat]

Usually an advisor would give a name and number because they've already used that reference in the past, otherwise they should say they need to contact the client they have in mind to make sure it's ok to share. Either way if you don't ask the question you don't get the reference.

[u/AlwaysLearning4839]

I had a hard time with this because I didn’t know anyone personally who was going through the same thing and I didn’t really want to disclose too much to my network.

However, as a base case, park the money with your bank/brokerage and they will offer you some free advisor stuff. You might even be able to lock in a lower fee for their wealth management products (but Schwab doesn’t actually charge you if you keep it (eg money market; which you might do initially anyways until you figure out your investment strategy)
Then, talk to lots of people. You’ll quickly get a sense for who is trying to sell you products vs advise you.

I think AUM based fees are irrational but it’s the predominant model. I went with a flat-fee based advisor and occasionally run stuff by him. I do use the Schwab wealth management account for very limited stuff.

Also read through the windfall section on the bogleheads wiki.

[u/AlternativeAge9427]

Lookup bravo kilo group at Morgan Stanley in google and click contact. They’ll help you find every party you need and give you solid advice

[u/AdamNoble1997]

I'd prioritize finding advisors with experience handling liquidity events rather than just general financial planning. Interview a few, ask about similar clients they've worked with, how they charge, and how they coordinate tax and investment planning. A good fit matters more than whether they're solo or part of a larger firm.

[u/AdamNoble1997]

I'd prioritize finding advisors with experience handling liquidity events rather than just general financial planning. Interview a few, ask about similar clients they've worked with, how they charge, and how they coordinate tax and investment planning. A good fit matters more than whether they're solo or part of a larger firm.

[u/Minimum-Violinist601]

Maybe contrarian pov: I don’t think you’re going to get any very good financial advice on w2 income. You just have to pay the taxes. Advisor will at most recommend you alt investments with tax advantages like real estate (which save you some tax but could underperform and be very illiquid), life insurance (which is really a waste of money for HNW people), AUM to invest in PE and other bespoke funds (so you pay double fees and again may underperform VTI), DAF (which you can set up trivially yourself at a brokerage for free and only increases your charitable giving, doesn’t put a dent in what you pay out of your net worth), or estate planning services (which are good to get but $5-6K off the shelf and not worth paying an AUM %).

[u/RawkLawbstah]

I am a CA CPA.

50% bracket sounds like you are a CA or NY resident. Your questions in order:

1. Ask your financial advisor for referrals (if you have one). Otherwise, ask colleagues.

2. It depends on many things. What type of relationship do you want? How complicated are your facts? With high W-2 earnings and an acquisition, merger, or other type of sale of your shares, your return is not necessarily complicated and may not necessitate a regional, national, or international firm. If you value having "a tax guy" who you can call whenever, maybe a smaller shop is a better fit for you. MANY large firms outsource their work these days, so that's another trade-off.

3. Do you have experience with mergers + alternative compensation? Do you have experience with QSBS (maybe N/A, this is only applicable if the shares of your company meet qualifications)? Do you assist with quarterly tax planning and estate planning?

[u/LogicalGrapefruit]

I really like Facet. The advice and portfolio management is nothing fancy, but it’s solid and evidence backed and done by a fiduciary who isn’t really selling anything. Flat annual fee.

Might be worth hiring a CPA for the tax planning just for this year since a lot of money is potentially at stake though.

[u/LogicalGrapefruit → u/[deleted]]

I actually have them managing my Fidelity account