Episode 46: What is your wealth for? The executive’s planning challenge.

Oscarlyn Elder:

Career success creates opportunity. It also brings greater complexity, particularly when it comes to managing personal finances. I’m Oscarlyn Elder, head of investment management at Truist Wealth. And this is I’ve Been Meaning to Do That, a podcast from Truist Wealth, a purpose-driven financial services organization. We appreciate you listening.

It’s easy to think that once you’ve reached a certain level of professional success, your financial future is largely set. But for many executives, that’s when some of the most important planning decisions are made, when it’s not about building wealth anymore as much as making sure that wealth supports the life you want to live.

I’m joined today by two of my Truist Wealth colleagues who work with corporate executives, among others, to help coordinate the complex web of compensation and finances. Paul Giliberto is a wealth strategist, and Sarah Welch is senior vice president and wealth advisor.

Welcome, Paul and Sarah.

Paul Giliberto:

Thanks for having us on today, Oscarlyn.

Sarah Welch:

Thanks, Oscarlyn. It’s great to be here. Looking forward to the conversation.

Oscarlyn Elder:

Paul, let me turn first to you. Executives tackle big challenges and make decisions for their companies every day. From the outside, they appear to have their own financial future figured out. When they first sit down with you to talk about their own wealth, what are they often surprised to learn?

Paul Giliberto:

Yeah, we do see a few common themes with our executive clients that work for publicly traded companies. One is that it’s not unusual for them to completely underestimate their total income each year, and that’s usually due to the value of the company stock that they receive as part of their compensation package. A second one is that they often underestimate how much that company stock makes up as a percentage of their total financial assets as well as their net worth. And finally, we find that many of our executive clients are surprised by the complexity of their company’s compensation and benefit plans. So understanding how to evaluate all of these plans and then integrate those with their personal financial goals, that can be a daunting task.

Oscarlyn Elder:

So Paul, what you’re saying is that they know that their net worth, that their financial plan is tied to the success of their company, but they don’t understand the degree of it. They’re underestimating how leveraged they are to where they’re working.

Paul Giliberto:

Yeah. I mean, it’s not unusual for us to see an executive client have 50, 60, 80% of their net worth or financial assets tied to that one company’s stock, whether it’s stock that they own directly or derivative forms, such as stock options, restricted shares, performance stock, those types of plans that are very common in corporate America today.

Oscarlyn Elder:

Sarah, you’ve made the point to me that the biggest questions in wealth planning aren’t spreadsheet questions. They’re life questions. They can’t be answered with the numbers alone. What does that mean for someone like an executive who has lots of different numbers on their personal finance spreadsheet but isn’t sure what to do with them?

Sarah Welch:

Executives spend their careers making decisions, and they’re basing that on data and forecasts and metrics. But when it comes to their personal wealth, the most important decisions that they’re going to make aren’t really about numbers. They’re going to be about people, priorities, and purpose. The numbers are able to tell you what they have. They can tell you what’s accessible today, what’s tied to future events. They can tell you what taxes you owe, but they can’t tell you what you want your wealth to accomplish. And so, before we start talking to clients about strategies or about priorities, we’re talking more about who are the people that you care about? What opportunities are you trying to create? What are you trying to protect? What kind of life do you want your wealth to support? And I think once those answers become clear, the numbers become much more meaningful because they’re being evaluated against a purpose rather than just being a number on a spreadsheet.

Oscarlyn Elder:

Yeah. And, Sarah, can you give us some examples?

Sarah Welch:

Well, I think when you sit back and you’re talking with somebody and you’re getting outside of the numbers, you’re talking about their families, you’re talking about aging parents, you’re talking about education goals and dreams. And so, you’re also talking about the pressures of executive leadership. And those conversations become much more meaningful when we’re not just focusing on the numbers and we’re actually focusing more on what’s important to that family.

Oscarlyn Elder:

And, Paul, how does that relate then to the financial planning?

Paul Giliberto:

That’s a good example, Oscarlyn, of why our approach to planning with our clients, we focus both on strategic planning and tactical planning. So, if we want to think about strategic planning for a minute, that’s going to be similar for pretty much all of our clients, regardless of the source of their wealth, whether they’re a business owner, whether they’re an executive, whether they’ve inherited money. They’re typically going to want to have help answering questions like, do I have enough money to retire? Can I afford to pay for my child’s education? Tactical planning, however, that’s going to be different for, let’s say, a 65-year-old owner of a family business that’s worth $25 million compared to a corporate executive who’s 65 and has $25 million in company stock. The approach to how to handle those assets within their overall planning is going to be very different from client to client.

So we really want to make sure that we understand what those financial goals are for our clients and also make sure that our clients know what it might take to achieve the goals that they’ve laid out.

Oscarlyn Elder:

That’s great information, Paul. But once a person knows what they want their wealth to accomplish, I’d like to know what does that mean to build a coordinated wealth plan? Sarah, help me understand, how does having this coordinated wealth plan, how is that different from having a financial plan on the shelf? Because I think a lot of folks, they’re still remembering the days where a 300-page document might have been delivered in print, and often it did end up on the bookshelf.

Sarah Welch:

That’s just a document. But when you have a coordinated wealth plan, it actually becomes the framework for decision-making and it answers questions like, does the decision move me closer to what’s most important to me and my family? It’s not just making sure every financial decision, but actually every advisor, is moving in the same direction, that the retirement plans, that the executive compensation, deferred compensation, the stock units, all of it is coming together, but also integrating the advice across the entire financial ecosystem.

Paul Giliberto:

This is something that I actually get excited about, Oscarlyn. I’ve always been a fan of this quote from Dwight Eisenhower, and his quote was something along the lines of, “In preparing for battle, I’ve always found that plans are useless, but planning is indispensable.” And I find a lot of similarity with this quote and our approach to the wealth planning process for our clients. We don’t view wealth planning as this once-in-a-while static exercise. It’s something that’s constantly evolving. And we want to make sure that we provide those clients with enough information and enough context that’ll allow them to make the most effective decisions to reach the financial goals that they have. And ultimately, like General Eisenhower said, we want our clients not to be focused on that static noun “plan,” but instead be focusing on the term of active planning.

Oscarlyn Elder:

That’s right. It’s the action part, and the integrated nature of it, if it’s executed appropriately, helps provide a north star. Has there ever been a question that you’ve asked a client that completely changed the direction of the planning conversation that you were having?

Sarah Welch:

Yeah, I can take that, Oscarlyn. I can remember when I was meeting with a very successful healthcare executive and his wife, and before we started talking about compensation or investments or planning strategies, I asked them a simple question. I said, “What do you as a family want your wealth to make possible?” And it was interesting, they looked at each other and then after a long pause, his wife looked at me and said, “Nobody’s ever asked us that.” They had spent many years building a family and creating significant wealth, yet no one had asked them what they wanted their wealth to do for them. And it was in that moment that the conversation shifted, and we really spent the rest of the meeting talking about their children and charities that they cared about. They talked about the responsibility that they felt toward each other and for others.

And we even talked about what the next chapter might look like after the C-suite. And so the answers from that one simple question ended up shaping really every planning decision that we made past that point.

Oscarlyn Elder:

That’s very powerful. Paul, how about you?

Paul Giliberto:

I’ve been fortunate to work with a number of clients with significant wealth, and they know they have enough money for their personal retirement. They know that there is enough to satisfy the legacy that they want to leave for their family, but they’re also charitably minded. And I’ve had a couple of occasions where clients that have significant charitable intent, I’ve asked the simple question of, do you feel like you have a stewardship obligation to continue to grow your balance sheet in order to make a bigger charitable impact in the future? Because a lot of times we find that these clients will say, “Hey, I can afford to be a very conservative investor and satisfy all the financial goals that we have for our personal generation as well as for the next two generations of our family. So why should we introduce any risk to our investment thesis?”

But when you turn the conversation in the direction of charity, that starts to get some of these clients thinking about the idea of, “Hey, maybe there is a bigger purpose to my balance sheet and I should possibly be thinking about now that I know that I’ve taken care of my family, what’s next in my legacy journey?”

Oscarlyn Elder:

Even with a thoughtful, coordinated plan in place, life still happens. Let’s talk about how events and risk might change an executive’s wealth planning when we come right back.

Life has a way of unfolding in unexpected ways. What are some of the events or changes that can disrupt an executive’s financial plan? Paul, what have you seen?

Paul Giliberto:

Yeah, most of our clients, executive or otherwise, they think about their investment portfolio, the expected rate of return of that portfolio over the next several years, and how that fits into achieving their financial goals. And certainly, for a corporate executive, this is compounded by the fact that we usually see a significant concentration in one company’s stock. So, if that underperforms, that’s actually a big deal. But a couple of other items sometimes they don’t always think about could be what about a health issue? If I get sick, maybe I’m unable to work anymore. How does that change my approach to meeting those financial goals? And then finally, not unusual in corporate America to have restructurings periodically. And what kind of an impact could that have if their job is impacted by a restructuring at their employer?

Oscarlyn Elder:

Absolutely. It can certainly be unnerving. Sarah, is there something that you’ve seen in your experience that separates people who adapt in that type of situation from those who really struggle moving through those situations?

Sarah Welch:

The best answer to those who adapt is really around flexibility. So, the executives that I’ve sat with that have been able to pivot and adapt in those situations, they haven’t built their lives around a single outcome. And they have been very mindful in thinking about the what-ifs. They’ve created options, they’ve built liquidity, they’ve diversified thoughtfully. They might have even had conversations with their families about what matters most. And when they have that preparation, it definitely creates confidence, and it creates options when life happens. And so, the people who struggle are the ones whose plan really kind of depended on things going exactly as expected because we’re not going to be able to eliminate uncertainty. But what we can do is we can make sure that the family is not left without options.

Oscarlyn Elder:

And we see that when folks are planning, like for health outcomes, often they plan under a best case. And what I’m hearing you say is that broader lens of understanding the range of potential outcomes helps bring flexibility. And it’s that flexibility that helps someone and their family move through a more challenging period.

Paul, we know that diversification, it doesn’t ensure against loss or assure profit, but I’m also hearing from you that it can be an important way to protect against the unknown. And I think most businesspeople understand why, but it still seems hard often for executives to really proactively control their exposure to the company that they work for. Why is that?

Paul Giliberto:

We find that executives are typically going to be loyal to their company and their company stock. I mean, let’s face it, it’s often the reason why they have a significant balance sheet to begin with. I think a couple of other things that come into play with our executive clients is that they may have a certain set of written guidelines or rules at the company that say you’re required to own a certain multiple of your salary in company stock. And then as you accumulate stock, you might only be allowed to trade in the company stock once a quarter after earnings are released. So, they might have restrictions on how often they could potentially monetize and diversify that stock. So, it becomes easy for them to just continue to accumulate company stock over the years and see how their balance sheet has potentially grown as a result of that.

But we like to make sure that our clients also understand, hey, there is potential downside risk here of having one significant company stock. I think if you look just in the last 10 years, we’ve had this great bull market for stocks, and a lot of clients have seen their wealth grow, whether it’s from a diversified portfolio or one single company stock. But there’s also plenty of examples along that same timeline of stocks that have decreased in significant percentages. So let’s explore what might be a better game plan going forward relative to how much of the company stock is part of their investment portfolio.

Sarah Welch:

And Oscarlyn, I wanted to touch on something that’s maybe a little bit more on the emotional side of things because many executives, their connection to the company is going to go far beyond the stock. I mean, if you think about it, it’s their compensation, their career, their reputation. Their relationships are often tied to that company. It might even be a part of their identity. So, the diversification, it’s not just a financial decision. It’s very personal, and it is emotional. And so, in many cases, the same concentration that helped them create the wealth is actually what makes it very difficult for them to reduce the exposure. So, I think for Paul and I, the challenge is finding the balance between honoring what’s built and creating the flexibility that’s needed for the future.

Oscarlyn Elder:

And that’s a real key part of why advisors working with corporate executives can be so powerful is because what you’re bringing is an outside voice to help ensure hopefully that the conversation is had around concentrated exposure and the potential for diversification. And as I pointed out, diversification doesn’t mean necessarily that it’s going to work out as intended. There’s no guarantees, but it is an important element usually in changing a risk profile. And so an advisor who’s regularly bringing up that conversation can help an individual step back and look through a different window, if you will, to understand what the future could entail.

We talked about the things that we can’t control or predict with any certainty. How then do you help people plan for that uncertainty without getting paralyzed by it?

Paul Giliberto:

I think the easiest way to help them with that is to try to make it as simple as possible. We try to help our clients understand what they might be missing. So that’s really my starting point is to help them understand certain things about their financial life that maybe they hadn’t thought about before. And how do we do that in the most efficient way possible? Because the reality is these are busy clients. They don’t typically have a lot of time to devote to handling their own personal finances. And we just want to make sure that we give them enough information so that they can confidently make those decisions, whether it’s related to changes in their estate planning, how they have their beneficiary designations set up on company retirement plans. So, things along those lines, make it as simple as possible so that it doesn’t lead them to a case of paralysis around just making those decisions.

Oscarlyn Elder:

Paul, I think you bring up a really important point because within the corporate structure, executives have broad scale and scope that they’re responsible for. And there is usually a way that they’re communicated with to help distill information into what’s most important, what action needs to be taken and why and where the risks are. And what you’re saying is that as we approach corporate executives, we understand that framework and we look to simplify so that they can make that decision and start to move forward and they don’t get paralyzed with too much information that makes the decision making more complex. Sarah, how do you think about this?

Sarah Welch:

Yeah. So, I think the only thing in life that is certain itself is change. And so, when we are helping executives create flexibility, yes, it’s helping them simplify, but it’s also making sure that they’re able to make those decisions from a place of confidence. And so, what we’re trying to accomplish with planning, it’s not the certainty, but it’s really options and the ability to pivot, if needed.

Oscarlyn Elder:

Yeah. So, optionality is so important. And these are folks who’ve worked really hard over the span, often, of decades to create that optionality. And so having a guide to help through that is super important. So, I imagine that some successful, well-paid executives come to you already, I’d say, moderately confident about their financial situation. What are they often surprised that they haven’t considered? Paul, what have you seen?

Paul Giliberto:

I’ll give you a couple of examples. One would be not understanding what happens to their company stock plans in the event of their death or disability. A lot of times our clients have no idea, as an example with stock options, “How much longer after my passing does my estate continue to have the ability to exercise those options?” So that’s a very common area where we find a lot of our executive clients don’t really know how their plans work.

One other example is it’s not unusual for us to have clients, executive or otherwise, that have never used highly appreciated stock as their currency for their charitable giving. It’s really easy to pull out a checkbook or swipe a credit card to make a charitable gift, even in significant sizes. However, it’s an education process to help them understand the benefits to using highly appreciated stock as their currency for those gifts.

It reduces their exposure to the company stock. It keeps their cash position as is. So, if you think about it from an overall investment perspective, as well as how much of those investments are tied to company stock, it’s a tactical way of diversifying a portion of their company stock exposure.

Oscarlyn Elder:

Paul, flexibility and creating options are important. But we know that diversification doesn’t ensure against loss or assure profit. So, especially for executives, it’s really important that they talk to their tax advisor about their own situation, and with their financial planning advice, determine what’s appropriate for their situation.

Sarah Welch:

And, Oscarlyn, I would say at a high level, I think some of the things that people are most surprised to learn is just because they have a high net worth or a very strong balance sheet, it doesn’t automatically create options for the family. And I keep going back to this, but on paper, they have significant wealth, but it could be tied to the company stock, deferred compensation. It might be a business interest, or it could be future events that haven’t happened. So, with their life and the numbers always changing, it is about creating options, and it’s being proactive because it isn’t just accumulating wealth. It’s making sure that the choices and the opportunities are able to evolve as life happens.

Oscarlyn Elder:

I just want to make sure that folks know that we do not provide tax advice or planning at Truist. So, it’s really important, especially for executives, to talk to their tax advisor about their own situation; combine that with the financial planning advice to determine what’s appropriate for your situation. Flexibility and creating options are important. But as we talked about earlier, the real goal is to help support the life you want to live. We’ll talk about what that looks like in just a minute.

Sarah, people often say they want to achieve financial freedom. That’s a very broad concept. When you hear executives use that phrase, what do they usually mean?

Sarah Welch:

Financial freedom is not going to be typically what you think. It’s not necessarily the ability to retire or to quit working. Actually, they love building, leading, creating, innovating. It’s the very thing that energizes them. So financial freedom is about choice. It’s about the ability to say yes to the right opportunity and no to the wrong. It’s being able to continue working because they want to, not because they have to. And it’s when decisions are really made from conviction and not fear. So I think that it’s the point when the money becomes the by-product of the good work that they’re doing versus the reason that they’re doing it. It’s really just having the flexibility. It’s having choice.

Oscarlyn Elder:

Sarah, that’s, I think, incredibly insightful that financial freedom perhaps is giving someone the optionality to engage where they are energized and having the flexibility to pivot within that. Paul, how do you think about it?

Paul Giliberto:

I think the typical person when they hear those words, financial freedom, is usually going to default to, is my balance sheet large enough that I can afford to retire from active employment? We’re very fortunate to work with clients of significant means. And frankly, many of them are already there. So financial freedom really tends to become more about what’s next. Can they afford to slow down in their corporate career and maybe engage in both for-profit as well as charitable board work? But they’re also thinking about their family legacy and what do they want their financial resources to be able to do for the next generation or generations of their family?

Oscarlyn Elder:

What changes for someone once they’ve achieved that sense of financial freedom, however they define it, especially if that person is an executive with all of the wealth complexity that we’ve been talking about?

Sarah Welch:

The conversations become much more focused. They become more intentional. They start to shift from, how do I grow this, because there’s different stages of the executive’s career, to more, how do I protect it? And what can I make possible with the wealth that I’ve created? Because at some point, the executive’s going to step back from their life and they’re going to realize the success that they have created has created complexity. Complexity could be created from a liquidity event, a career transition. Maybe they’ve added an elite team of advisors around them as they’ve continued to need more things along the way. And that’s when our conversations about family and the estate strategies, the charitable impact that they want to have, the legacy they want to leave, and what that next chapter of life looks like, be it retirement or another business venture or something that they’ve always wanted to do that’s when those conversations naturally moved to the forefront of our conversations.

Oscarlyn Elder:

And I just want to point out, as we’ve said before, Truist doesn’t provide tax and legal advice. So as someone is walking through that journey, it’s really important that they have not only their wealth advisor in the conversation, but also their tax and legal advisors as well. For someone listening today who may be realizing that they’ve been focusing a lot on building wealth over the years, and they’ve spent less time thinking about what they want to accomplish with that wealth for themselves, their family, or people and causes that they care about, where would you suggest they begin? Paul, what do you think?

Paul Giliberto:

Yeah, I always like to tell a client that we’re meeting for the first time that I give them credit for actually engaging with us on what can be a sometimes-difficult process. There’s a lot of time commitment involved with evaluating their overall wealth planning and making sure that we understand their financial goals and that they understand what it might take to get there. So really, we want to focus on strategic planning first, then transition into tactical planning with them and try to make it as easy to manage as possible.

Oscarlyn Elder:

And, Paul, I think one of the areas that an advisor can be extremely helpful in is helping folks understand potential blind spots or gaps. How do you think about that?

Paul Giliberto:

We really feel like we have an obligation to make sure that they understand, do they have any gaps in their overall planning? Some of them are relatively simple to solve. It’s not unusual. We will have a client that’s, when we ask them about personal liability insurance, they say, yes, I have $500,000 of coverage with my auto or homeowner’s policies. And they’ve never thought about maybe they should have 5 or $10 million of umbrella liability coverage. So some of those things are simple. Others could be a little bit more complex. And maybe there’s a retirement plan that says, “Hey, you are scheduled to receive certain payments from this retirement plan in 10 years after your retirement. However, maybe there’s a section that says if you haven’t been employed with the company for at least a certain period of time, it’s all going to pay out to you in a lump sum six months after you leave the company.” That’s a big difference.

So that’s really where we want to help our clients is to make sure they understand how all of these pieces fit together in their financial puzzle.

Oscarlyn Elder:

Yes, that’s very insightful, Paul, that it’s important with corporate executives because the plans can be so complex. Sarah, how do you think about this?

Sarah Welch:

I think that it’s really hard to know where you want to go if you don’t fully understand where you are. So, think about two simple questions. What is most important to you? And then, what do you want your wealth to make possible? Because people spend decades building wealth, but they spend very little time thinking about the answers to those questions. Because what I have realized is that when we start there, how they answer those questions are going to shape every financial decision, including all of the technical ones.

Oscarlyn Elder:

Well, the complexity in executive wealth and compensation we’ve been talking about is truly challenging, but it also creates a lot of opportunity. So there would be a lot of ways to continue this conversation with a wealth advisor. I appreciate you both sharing your perspectives with us today.

Paul Giliberto:

Thanks for having us, Oscarlyn.

Sarah Welch:

Really appreciate it. Thank you for having me, Oscarlyn.

Oscarlyn Elder:

But before you go, there’s a question we always ask our guest, and I’d love for both of you to answer it too. We ask, what’s the one thing that you’ve been meaning to do that you haven’t done yet and that you’re willing to commit to doing now with our audience listening? Sarah, why don’t you go first?

Sarah Welch:

OK. I love this question. One thing that I’ve been meaning to do is actually something that I used to do regularly. And the busyness of life has taken that away. And that is creating time each morning to pause before the day begins. I’ve always been the person that gets up at 4:00 am with coffee, work, and a workout, but recently I’ve recommitted to spending that time in the morning just to be still and to reflect, pray, focus on what matters most because I’m a mom, I’m a wife, an advisor. I’m also a teammate and a volunteer. And the thing that energizes me is I love pouring into people and the things I care about, but I’ve also realized that if I’m not intentional, every moment gets spoken for. And so even after a short time of doing this, those quiet moments are giving me perspective and intention, and they’re also helping me show up best for the people who depend on me. So I think my commitment is simple. It’s just to keep protecting that time in the mornings.

Oscarlyn Elder:

Sarah, thank you for sharing that. I think a lot of us struggle with finding that quiet time and I admire you if you’re getting up at 4:00 am to create that space. That’s incredible. Paul, how about you?

Paul Giliberto:

Well, nothing says commitment like forcing us to record what we’ve been meaning to do. So I will say then just in 2026, I have rediscovered something I really enjoyed when I was younger, and that is running. And I am committing that I will complete a full marathon in 2027.

Oscarlyn Elder:

Wow. All right. Well, we will check back in with you to see how that goes. You’ll have to send us some pictures so that we have evidence of that accomplishment. That’s incredible.

Paul Giliberto:

Will do.

Oscarlyn Elder:

Paul, Sarah, thank you both again for joining me today. Listeners, I want to thank you as well. If you liked this episode, please be sure to subscribe, rate, and review the podcast and tell friends and family about it. I want to note for our audience that Truist Wealth will publish a new Purple Paper in the very near future. This paper will include a great deal of helpful information for executives about their personal wealth planning. Both Sarah and Paul are contributors to that paper. It will be available for download at Truist.com/executive. I also invite you to listen to the podcast from Truist Securities, Navigating Beyond the Expected, at Truist.com/BeyondPodcast. If you have a question for me or a suggestion for this podcast, email me at DoThat@truist.com. I’ll be back soon for another episode of I’ve Been Meaning to Do That, the podcast that gets you moving toward fulfilling your purpose and achieving your financial goals.

Talk to you soon.

Narrator:

Oscarlyn Elder is an investment advisor representative, Truist Advisory Services Incorporated. Sarah Welch is a registered representative, Truist Investment Services Incorporated. And an investment advisor representative, Truist Advisory Services Incorporated. Any comments or references to taxes herein are informational only. Truist and its representatives do not provide tax or legal advice. You should consult your individual tax or legal professional before taking any action that may have tax or legal consequences.