Kestrel Bay Retirement Advisors suggests that a financial advisor for tech employees prove, in numbers, how they handle ESPP basis, AMT runs and multi-year stock sales. Medicare sets each year's premium from your income two years earlier, so a good advisor will ask when you plan to sell and show which years' income lands in that window.
Most people interview advisors the wrong way. They sit through a portfolio pitch, compare a few fee percentages and pick the person they liked. None of that tells you whether the advisor can price an ESPP lot, an ISO exercise or a five-year sale schedule, and those are the decisions that cost tech employees real money.
We wrote this walkthrough at Kestrel Bay Retirement Advisors for people who hold a lot of one stock and are talking to advisors now. It gives you the questions, what a strong answer sounds like, what a vague one usually means, and how to check each answer against your own documents.
How do you interview an advisor step by step?
Give every advisor the same homework: your ESPP lots, an ISO exercise you're considering and a five-year sale question. Then line up their answers in one table. You end up judging numbers on your own stock, and the sales pitch drops out. Four steps cover it.
Expect to spend a couple of evenings on this. It is worth it, since the advisor you pick will influence several years of tax bills.
- Step 1: Before any call, collect last year's W-2, your 1099-B, the ESPP purchase statements and a list of unvested grants.
- Step 2: Send the same three scenarios to every advisor you talk to: an ESPP sale, an option exercise and a multi-year sale schedule.
- Step 3: Ask for the answer as numbers (tax by year), not as a description of a process.
- Step 4: Compare in one sheet and rank on how specific each answer is.
What a strong answer sounds like, and what a vague one means
On ESPP basis, a strong advisor compares the broker's 1099-B basis with the discount income on your W-2. The discount is already taxed as wages, but brokers often report only what you paid, so the gain looks bigger than it is. An advisor who simply trusts the broker figure may leave you paying tax twice on that part of every purchase.
On AMT, a strong advisor models an ISO exercise before you do it and shows you the AMT bill in dollars. A vague one says a CPA will sort it out in April, and by April the shares are exercised and the bill is fixed.
For multi-year selling, ask for a table of sales by year with the gain and the tax for each. 'Sell when it feels right' is not a plan. And on Medicare, a strong advisor asks when you plan to retire and tracks income from two years back, because premiums follow that income. If the subject never comes up, nobody is looking that far ahead.
The table below puts the pattern in one place. Notice that the last row is a real plan with numbers: Rafael's, which the next paragraphs work through.
Hypothetical: Rafael, 55, holds $650,000 of ESPP stock with $140,000 of basis and plans to retire at 60. Assume a flat price, all shares past their holding periods and a single filer. Advisor A sells $130,000 a year at ages 55 to 59: $650,000 ÷ 5 = $130,000, with basis of $28,000 a year ($140,000 ÷ 5), so $102,000 of gain a year.
Advisor B says wait until 63 and sell everything: $650,000 − $140,000 = $510,000 of gain. That pushes his income at 63 above $500,000, and Medicare uses that year to set his premium at 65. Part B then costs $689.90 a month against the standard $202.90. The difference is $487 a month, or $5,844 for that year. A flat price is only an assumption for the arithmetic. Real shares can lose value, and the money you put in is at risk.
| Topic | Strong answer | Vague answer means |
|---|---|---|
| ESPP basis | Matches 1099-B to W-2 | Trusts the broker's figure |
| AMT runs | Projects before you exercise | Estimates at tax time |
| Multi-year selling | Year-by-year sale table | Sell when it feels right |
| Medicare premiums | Tracks income two years back | Never mentions it |
| Rafael's plan | $130,000 a year, ages 55-59 | Everything at 63 |
Common myths about advisors for tech workers, and what is true
Myth: a portfolio manager handles RSU taxes. Many only invest the money and don't run tax projections on vests or exercises, so ask who does. If the answer is 'your CPA', find out whether the CPA sees the investment side before you sell.
Myth: a lower fee percentage always means a lower cost. At 1%, a $500,000 account pays $5,000 a year, so ask for the total in dollars and what it covers. A cheap fee with no tax work can cost more than a higher one that prevents a bad year.
Myth: letters after a name prove equity skill. Credentials show training in planning generally, so test with your own scenarios. We'd trust a sale table over a certificate, because the table is specific to you.
Myth: selling everything at once is the cautious choice. A lump sale can push a single year's income over $500,000, which is exactly what happens to Rafael's Advisor B plan. It also moves you into the top Medicare surcharge tier.
Specialist advisor: pros and cons
A specialist isn't automatically the right call. Here is the honest trade. If company stock is a small slice of your net worth, you may not need one at all.
The decision rule we'd apply: if one stock is over 20% of your net worth, give the advisor your documents. If they can't produce a year-by-year sale schedule with the tax for each year within the first two meetings, keep interviewing.
- Pro: a specialist has seen the ESPP basis problem and ISO exercise timing many times and can price them quickly.
- Pro: they build the sale schedule around your tax years, not just your risk level.
- Con: fewer firms qualify, and many set an asset minimum, so your options may narrow.
- Con: you still need a CPA to file the return, and the two must share the same numbers.
Mistakes to avoid when choosing
The costliest error is hiring on an investment pitch without asking for a tax estimate of the first sale. In Rafael's example, a lump sale at 63 instead of a schedule costs about $5,844 a year in extra Medicare Part B premiums alone, before any capital gains tax. Four mistakes are worth naming.
- Judging on past returns in a pitch deck: you can't compare them, and nothing says they repeat.
- Skipping the documents: without your 1099-B and W-2 the advisor can only guess at basis, and a missed discount adjustment means paying tax twice on part of every purchase.
- Accepting 'we look at taxes in April': by then the stock is sold and the tax year is closed.
- Comparing fee percentages only: ask for the dollar total and how it changes if your stock falls or rises.
Checklist to run each advisor through
Print this and fill it in after each call. A plain yes or no is enough, and every 'no' tells you something.
- Do they ask for your 1099-B, W-2 and option grant statements before giving advice?
- Can they explain AMT and show a projection for one ISO exercise?
- Do they show tax by year for a sale schedule, with the Medicare premium effect?
- Do they give the fee as a dollar figure in writing and say who else is paid?
- Do they say what they would not do for you?
How Kestrel Bay Retirement Advisors answers these tests
Kestrel Bay Retirement Advisors prices the tax on a sale, this year and over a lifetime, before it suggests selling a single share. The firm's minimum is $400K in investable assets. We meet by video or phone, so you can run the three scenarios with us from anywhere in the US.
Fees are explained before you decide, and we'll tell you if a CPA you already have can do the job. These questions screen for stock-compensation skill but say nothing about future results. No answer replaces checking any advisor's registration and fee disclosure on public regulator sites. Our equity compensation planning and concentrated stock work follow the same tax-first order. For the basics, see our explainer on RSU taxation at vest and at sale.
What to do this week if you're hiring an advisor
Keep it small. Two good comparisons beat five rushed ones.
- Open your last 1099-B and find the ESPP lots; note any where basis looks lower than what you paid.
- Write the three scenarios on one page with round numbers from your own account.
- Book two calls, not five, and send the page in advance.
- After each call, mark which answers came with numbers and which came with adjectives.
Questions for a financial advisor for tech employees
How much does an advisor who understands stock compensation cost?
It varies by firm and by what the fee covers, so ask for a dollar figure in writing. For illustration, a 1% fee on $500,000 is $5,000 a year. Also ask who else is paid and whether tax projections on vests, exercises and sales are included or billed separately.
Do I still need a CPA if I hire an advisor for my equity?
Usually yes. Most advisors don't prepare or file your return, so a CPA or other preparer still signs it. What matters is that the advisor and the CPA work from the same numbers, including ESPP basis and any AMT figures, before shares are sold.
Is a fee-only advisor better for RSUs, options and ESPP?
Fee-only describes how the advisor is paid, not how well they handle equity. It can reduce some conflicts of interest, but you still need to test skill with your own scenarios: ESPP basis, an ISO exercise projection and a sale schedule with tax by year.
This information is general education only and does not account for your specific circumstances, goals or finances. It is not investment, tax or legal advice. Investing involves risk, including the possible loss of principal. Before making any financial decision, consult a qualified professional about your own situation.