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StockOpter? Advisor News Brief |
Seasons Greetings and Welcome to the Final Edition in 2006
This quarterly newsletter is dedicated to helping financial advisors attract and assist clients with equity compensation. Please do not hesitate to
email us if you have any ideas on content that would facilitate your success in this market.
Year-End Issues to Discuss with Clients
The last month of the year is generally hectic given the holidays, but it is also an important time for a short discussion with your clients and prospects that have stock options and other forms of equity compensation. Here are a few
questions that you should be asking individuals with equity compensation before the end of the year:
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Did they exercise and hold any ISO shares during the calendar year? If so consider conducting a disqualifying disposition analysis (see
3rdQ 2006 Newsletter) to determine if it makes tax sense to sell the underlying shares prior to year end.
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Do they plan on exercising and holding ISOs in 2007 to get preferential tax treatment? If so recommend doing so as early in the year as possible so that they have most of the 1 year holding requirement met prior to the end of the current
tax year. Also consider running a break even analysis using
StockOpter? Pro to determine the stock price needed at the end of the holding period for this to make sense.
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Has it been over 1 year since they took the time to systematically review their equity compensation holdings (stock options, restricted stock awards, stock appreciation rights, etc.)? If this is the case, use
StockOpter? Insight or the
NWSI Back Office to create a
Personal Equity Profile to serve as a framework for this discussion. This report enables an advisor to clearly articulate the
5 Things Executives Need to Know About Their Equity Compensation.
For additional information on year-end equity compensation planning strategies visit
myStockOptions.com. Their recent
newsletter contains 2 excellent FAQs and links to 4 comprehensive articles on year-end planning.
StockOpter? Planning System Special
Equity compensation planning is still one of the best ways to attract and retain high net worth clients because recent corporate plan changes have only served to complicate the decision-making process for executives. If you are interested
in pursuing this under-served market, you can now purchase the StockOpter? Planning System at a substantial discount before January 1, 2007. The StockOpter? System includes the following components:
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StockOpter? Insight: easy-to-use software for building relationships with executives and identifying diversification opportunities.
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StockOpter? Pro: sophisticated software that illustrates, compares and optimizes the after tax cash flow effects of various exercise and sell strategies.
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Recorded training webinars on both "Insight" and "Pro" to facilitate using these powerful tools.
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Marketing material and live coaching to enable you to systematically engage executives and get referrals.
This system is currently priced at $1,475 and it will be going up as of January 1st to $1,655. However, until December 31, 2006 the StockOpter? System is only $999. For more information or to order the "System" call us at 877-728-5964.
New White Paper Builds Case for Executive Education
Bill Briggs, CEO of Net Worth Strategies chaired a panel on equity compensation education at the annual
NASPP conference held in Las Vegas in October. This session resulted in numerous requests by equity compensation professionals for a document they could share with their management to justify the investment in a more effective
education program. Consequently, we developed an
Executive White Paper that documents research establishing:
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The existence of a substantial gap between equity compensation costs and their perceived values by employees.
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That this gap can be closed by employing a personalized equity compensation education program.
This White Paper along with other research can be found at:
EquityCompensationEducation.com. The
full White Paper contains detailed information about the cost-value gap, the business case for closing it and a comprehensive description of the education program used to do so. However, we suggest starting with the short 2 page
Executive Summary which summarizes the research on the cost value gap and the case for personalized education.
If you are interested in providing corporate equity compensation education workshops, this white paper builds the business case for these programs. Please feel free to share the White Paper with your corporate contacts and
let us know if the cost-value gap resonates with them. If it does we will be happy to conduct a no-cost assessment to quantify the size of the gap for a specific population of executives. The details of the "Assessment Offer" can be
found in section IV of the
full White Paper. |
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Directory of Equity Compensation Planning Specialists
To help connect individuals who receive equity compensation with financial advisors who specialize in this form of planning, we've developed an online directory that serves this purpose. The
Directory of Equity Compensation Planning Specialists allows executives and professionals with equity compensation holdings to search for advisors by state. The listing includes licensed users of
StockOpter? Insight or
StockOpter? Pro that have opted-in to the directory. Basic listings are no charge and contain the user's name, city and state. If you are a current user of either "Insight" or "Pro" please review your listing in the
Directory by selecting your state. Let us know if you are not listed and would like to be included. Detailed contact and practice information is provided for a fee with a "Premium" listing.
Click here for details on the costs and terms of a premium listing in the
Directory.
Profile of an Equity Compensation Planning Specialist
Barry Kaplan of Cambridge Southern Financial Planners located in Atlanta Georgia is a CFP that has significantly grown his practice by serving executives. Prior to joining Cambridge Southern, Barry worked for The Ayco Company (the
Executive Financial Planning Division of Goldman Sachs). Barry is a Fee-Only advisor who uses a comprehensive, personalized and goals-focused approach to help executives to understand the complexities of their equity compensation and to
make decisions that enable them to achieve their financial and non-financial goals. He is also an Enrolled Agent, authorized to represent taxpayers before the IRS, with expertise optimizing the tax management of options and investments.
For more information or to contact Barry, please visit the
Directory of Equity Compensation Planning Specialists.
StockOpter? Planning Tip: Foreign Currency Grants
It's a small world so don't be surprised if you encounter an individual that has stock options or restricted shares granted on a stock that trades on a foreign exchange and in a foreign currency.
StockOpter? users need not worry about engaging this opportunity because both
"Insight" and
"Pro" can analyze a foreign equity compensation position with minimal effort. The key to doing this type of analysis is being consistent when entering the grant data so that the output illustrates the portfolio in either US Dollars or
in the foreign currency depending on what the client prefers.
For example, in StockOpter? Insight to create a
Personal Option Profile in Euros for stock options that were granted in Euros simply enter the grant price, the current fair market value, and the dividend in Euros. The quantity, expiration date, vesting schedule, and stock
volatility remain the same. Conversely, to create a Personal Option Profile in US Dollars for grants issued in Euros you must convert the grant price, fair market value and dividend into dollars. Whichever way the client prefers to see
the output the advisor needs only to enter the data in the same currency and to modify the .doc output to indicate the chosen currency. Regardless of the currency used, the content of the Personal Option Profile and the reasons for taking
action are not affected.
In StockOpter? Pro the grant entry process for foreign currency shares is the same as for StockOpter? Insight, but since Pro has a tax engine based in US Dollars it is better to convert the grant prices and fair market values into dollars
during the input process. All the other assumptions (taxes) will need to be entered in US Dollars. The tax and cash flow results of various exercise and sell strategies will be shown in dollars and since StockOpter? Pro is Excel based the
workbook can be modified to convert it back to the appropriate currency. |
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New StockOpter? Training Recordings
To better address the training needs of both
StockOpter? Insight and StockOpter? Pro users we are in the process of replacing our
monthly training webinars with recorded sessions that users can review upon demand. Windows Media Format recordings will be delivered via CD so StockOpter? users now have access to comprehensive training at any time and from any
computer.
Training Details:
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StockOpter? Insight Training: 45 minutes, $75 when purchased with Insight, $150 if purchased separately:
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Includes: an overview of the StockOpter Planning Process, a review of the concepts contained in the Personal Option Profile, and a walk-thru of the program.
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StockOpter? Pro Training: 2 sessions totaling 2 hours, $100 when purchased with Pro, $200 if purchased separately:
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Part I, Getting to Know Pro: walk-thru of features and functions, review of program output, and file management
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Part II, Option Planning Case Studies: diversification, targeting cash flow and ISO planning
If you are a current StockOpter? Insight or Pro user who previously attended a training webinar and want to get a copy of the recorded sessions, contact us at 877-728-5964 and we will mail you a CD containing the appropriate recordings for
a shipping and handling fee of $25. For corporations needing multiple copies, site licensing fees are available based on volume.
That's all for this edition!
From all of us at Net Worth Strategies, Inc.
We wish you Happy Holidays and a Prosperous New Year.
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