Straight Answers To The Questions We Hear Most
These are the questions clients and prospective clients actually ask, answered without hedging. Each one is educational rather than personalized advice, and each is reviewed by Sean Gerlin, CFP® CPWA® ChFC® CLU®.
Not every broker needs one. The case gets strong once your income arrives as commission, you file as a 1099 contractor or through your own entity, and no employer withholds your taxes or funds a retirement plan. Those three facts create planning work that nobody is doing on your behalf.
A fee-only advisor is paid solely by clients and earns no commissions on anything they recommend. A fee-based advisor charges client fees too, but can also collect commissions from selling investments or insurance. One word separates them, and it decides whether a recommendation can pay your advisor.
The opportunity sits in three places: which account holds which asset, when you realize gains, and what you do with losses. High income also triggers an extra tax on investment income and phases out deductions others get, which changes the order in which moves make sense. No single tactic does much on its own.
Plan from a multi-year average rather than last year's number. Set a baseline you can live on through a slow stretch, hold a cash reserve sized to your longest realistic gap between closings, and decide in advance where a large commission goes before it arrives. Most of the work happens before the wire lands.
Start by naming what you actually hold. Restricted stock units (RSUs), incentive stock options, non-qualified options, and ESPP shares are taxed differently and at different moments. Then decide how much of your net worth you're willing to leave in one company's stock, and write a selling schedule before the lockup ends, not after.
CFP covers comprehensive financial planning. CPWA focuses on advanced planning for high-net-worth clients. ChFC is a planning designation built on additional coursework with no single board exam. CLU concentrates on life insurance and estate transfer. Each requires study, an ethics commitment, and continuing education, and each can be verified online in minutes.
Fee-only advisors charge one of four ways: a percentage of the assets they manage, a flat annual fee, a monthly retainer, or an hourly rate. Percentage-of-assets is the most common. What you pay depends on the model, the complexity of your situation, and what the engagement actually covers. Ours starts at a $10,000 annual minimum.
First find out which beneficiary category you fall into, because that sets your deadline. Most non-spouse beneficiaries of an owner who died in 2020 or later must empty the account by the end of the tenth year. Within that window you usually control the timing, and the timing is where the planning happens.
Hire one when a wrong decision would cost more than the advice, or when the decisions have outgrown the time you have to make them. The usual triggers are a liquidity event, a big equity grant, an inheritance, a move to self-employment income, or a plan you keep meaning to write and never do.
