Wealth Management Services  

Pershing’s Wealth Management Group

The Private Client Group was established to help address the financial goals of high-net-worth clients. The use of stock options and restricted securities to compensate executive and management level employees is widespread. As a result, significant wealth is being generated at a rapid pace. Wealth continues to accumulate by more traditional means as well — through inheritances, gifts, and estate planning. Your high-net-worth clients may realize substantial gains with these assets, but they also face considerable implications such as the risk associated with holdings concentrated in a single sector, possible tax consequences, and limited liquidity. PCG provides wealth management solutions that can help you and your clients address these potential issues and maximize the opportunities they present.

Employee Stock Options

Many companies offer their valued employees stock options in order to encourage ownership, foster commitment to the company, and share in the company’s success. Options that are "in the money" may represent sizeable elements of compensation at executive or management levels. If your clients wish to exercise their employee stock options without funding the transactions independently, PCG can facilitate a variety of alternatives. Your clients have the option to exercise their stock options in a full or partial sale, with the ability to margin all or a portion of the shares. You can utilize the resources in PCG that are required to expedite this process, giving your clients prompt access to liquidity and allowing them to take advantage of these rewards, as available funds may be used for further investment and diversification.

Restricted and Control Stock Sales

Maintaining large holdings of restricted or control stock has its rewards—if a company does well, its recipients benefit greatly. These recipients may reap even greater rewards by selling all or a portion of their restricted or control shares and diversifying their portfolios. And since a thorough understanding of these securities is critical to realizing their full potential, you will be able to leverage the expertise of PCG for those clients who hold restricted or control stock. These types of securities are not freely saleable in public markets, and may be subject to applicable SEC Rules, such as 144, 145, or Shelf Registration. PCG can guide you and your clients through the complexities of selling restricted or control stock.

Restricted and Control Stock Loans

Liquidating large, concentrated holdings may not always be the most advantageous alternative for your clients. Significant tax ramifications may result if the stock was acquired at a low cost basis and has appreciated over time. Your clients can leverage these holdings by borrowing against them. Under qualified circumstances, your clients can pledge their shares as collateral and use the loan proceeds to diversify their portfolios or satisfy other financial needs. Your clients can generate liquidity, while maintaining ownership of the securities. PCG can assist with the qualification process and the execution of leveraged borrowing against these assets.

Additional Services

PCG can work with you to consider alternative investment vehicles and strategies for select clients, including hedge funds and collars. Access to these types of products can support strategies including capital preservation, risk protection, tax advantaged participation, leverage, and diversification. However, such investment alternatives require stringent suitability review and close coordination with your clients, and may vary in term, nature, or investment minimum. PCG facilitates participation in these complex products, and can support you in coordinating clients’ interests in these areas.

Alternative Investments

Alternative investments represent an increasingly popular product category among high-net-worth investors. In general terms, many investors seek alternative investments to counteract performance in traditional asset classes like equity and fixed income. Alternative investments include, but are not limited to, hedge funds and hedge funds of funds, limited partnerships, and non-registered Real Estate Investment Trusts (REITS).