Today, we’re excited to announce that we have reintroduced our radically improved Selling Plan. Now everyone can sell and diversify their company stock as though they had their very own Private Wealth Manager, saving them time, commissions, taxes and stress. We began the expanded rollout of our Selling Plan earlier this month and have already seen a fantastic response from Wealthfront clients who work at Apple, Arista Networks, Box, Google, Square, Twilio, Yelp and Zillow in large part because this kind of service is typically only made available to executives.
The idea came from Twitter employees
We first learned of the need to help people sell their concentrated company stock positions when our earliest clients at Twitter brought it to our attention during their IPO. The executives of Twitter had plenty of good options because they qualified for services from Private Wealth Managers, but the rank and file were left out in the cold. The Twitter folks consistently asked the following questions:
So we did what we do best: put our PhDs and engineers on the case to build a prototype that automated and improved the process of selling concentrated stock positions.
Shortly after launching our prototype to Twitter employees, we heard the same anxieties from our Facebook clients. From there, the demand grew and to date we have heard requests for our Selling Plan from employees at 300 public companies that represent such diverse industries as Energy, Healthcare, Financial Services, Oil & Gas, Software, and Telecommunications. We have now enhanced our Selling Plan from a prototype to a full-fledged and radically more convenient service that any shareholder can use to sell their shares over time and diversify their holdings.
The Benefits of a Software-Based Service
Benoit Sigoure, a software engineer at a prominent computer networking company in Silicon Valley, has been on our case for some time to expand our service. According to Benoit, “currently the only method available to sell company stock has been manual, which is painful, time consuming, and expensive. The stock administrators make it prohibitively expensive to sell regularly, their websites are awful and there’s no easy way to diversify your holdings. This has been a huge pain point for us after our IPO.” We are excited to offer Benoit and others a service that is even better than what high-end Private Wealth Managers offer:
- No commissions: A traditional broker mandated by your stock administrator can charge up to $19.95 per trade. This could cost you up to $5,000 per year* if you try to sell daily as we do with our Selling Plan. Fortunately, Wealthfront never charges commissions – for anything.
- Lower taxes: Wealthfront’s Selling Plan prioritizes selling shares with lower tax rates first and even sets aside the cash you will ultimately need to cover your taxes.
- Save time: Wealthfront works with you to create a selling schedule that fits your needs. Based on that timeline, we’ll sell some of your shares every day**. We even respect blackout windows. You can pause, restart, or update your Selling Plan at any time.
- Minimize regret: You can rest comfortably knowing you will not miss out when your company stock surges, or run the risk that you sell all your stock on the worst possible day because we will sell your stock daily over an extended period of time.
- Manage your new wealth: We make it easy to reinvest your sale proceeds in a low cost diversified Wealthfront portfolio. We can even set aside cash for upcoming purchases, such as a new home or car.
The Future of Work Benefits
We often hear frustration from people like Benoit with the third party brokers mandated by their HR departments. We’re proud to have built a service that requires no effort on the part of your employer. We take all the hassle out of the process by handling everything on our end. It’s just another example of how software can deliver a better solution than traditional approaches. Employees want help managing their finances. We’re here to help.
* Calculations for commissions is as follows: We multiplied the approximately 250 trading days per year times the assumed $19.95 per trade.
**Clients should be aware that in some instances (although rare) it may be difficult or impossible to trade the Clients’ securities. This liquidity risk may be caused by numerous factors, including but not limited to: 1) extreme market volatility, 2) a decision by exchange participants to withhold some or all of their quoted market bids, 3) exchange technical issues or exchange closure, 4) delisted or halted securities, and/or 5) a position across Client accounts that is large relative to the average daily trading volume of the security. Wealthfront may intentionally halt trading during rare or unusual market circumstances or if internal or external technical systems are not operating at a satisfactory operational level. Wealthfront may halt trading in individual accounts due to reasons specific to those accounts.
Nothing in this blog should be construed as tax advice, a solicitation or offer, or recommendation, to buy or sell any security. This information is provided for illustrative purposes only, and is not intended as investment advice, and Wealthfront does not represent in any manner that the circumstances described herein will result in any particular outcome. Investment advisory services are only provided to investors who become Wealthfront clients. For more information please www.wealthfront.com or see our Full Disclosure.
This article is not intended as tax advice, and Wealthfront does not represent in any manner that the outcomes described herein will result in any particular tax consequence. Prospective investors should confer with their personal tax advisors regarding the tax consequences based on their particular circumstances. Wealthfront assumes no responsibility for the tax consequences to any investor of any transaction. Investors and their personal tax advisors are responsible for how the transactions in an account are reported to the IRS or any other taxing authority.