Going Through an IPO? You Don’t Just Need a Financial Advisor — You Need a Team

Employees holding equity in a company approaching an initial public offering face a web of financial decisions that no single professional can fully address, according to a NerdWallet analysis [1]. Certified financial planners recommend assembling a coordinated team of specialists to manage planning, taxes, investments, estate, and insurance before, during, and after the liquidity event [1]. The process begins with a financial advisor who provides comprehensive planning. "The planning component sits on top of everything else," said Aaron Brickley, a certified financial planner at Brickley Wealth Management [1]. Because "financial advisor" is not a regulated title, NerdWallet advises vetting candidates through FINRA's BrokerCheck, the SEC's Investment Adviser Public Disclosure database, and the CFP Board [1]. Jane Yoo, a CFP with Jane Financial, noted that equity compensation carries specific pitfalls. "The tax implications of equity compensation, especially when it comes to stock options, can be really tricky," Yoo said [1]. Startups that reach the IPO stage represent a small fraction of new ventures. A minority of startups achieve notable success, with some growing into unicorns — private companies valued at over $1 billion — while the majority face high failure rates [4]. For employees at the successful few, the transition demands additional expertise. A certified public accountant familiar with equity compensation can model tax liability under different scenarios, and an investment advisor can help diversify holdings after the lockup period expires [1]. Advisors may charge one-time planning fees, ongoing advisory fees, or a percentage of assets under management [1]. Estate planning often gets neglected despite the sudden wealth. "No one wants to get their wills and trusts done. It's like people are allergic to it," Brickley said [1]. At minimum, an estate attorney should establish a will, durable power of attorney, medical care directive, and updated beneficiary designations [1]. Yoo also stressed liability protection. "Let's say your company goes public; you have this windfall and you accidentally rear end someone while driving, and you're at fault for causing injury," she said, noting that an umbrella insurance policy can shield assets if a lawsuit follows [1]. NerdWallet, the personal finance company that published the guidance, earns money by promoting financial products to its users [6]. The firm does not offer advisory or brokerage services itself [1]. The article underscores that even qualified professionals can deliver conflicting advice if they are not working from the same assumptions, and it recommends designating the financial advisor as the central coordinator [1].