Meet Sally. She's the chief operating officer of a large corporation and has been steadily accumulating her company's stock over the years.
That stock makes up a significant portion of her retirement plan.
Her company has been doing well, but what keeps Sally up at night is wondering if her retirement plan could recover from an unforeseen drop in the stock's value.
Sally knows that she's currently restricted from selling her stock, but she knows that she needs to diversify her portfolio to withstand potential volatility.
Uncertain about the best way to go about it, she decided to consult with her Wells Fargo Private Bank relationship team, including her Wells Fargo Advisors financial advisor, to help her understand her options.
Her team outlined how a credit strategy could help her diversify her portfolio while keeping her wealth plan on track.
They explained that she could obtain a line of credit using her concentrated company stock as collateral for the loan.
Then, by using the funds from her line of credit, she could then invest in a new, more diversified portfolio that aligns with her risk tolerance and goals.
Sally liked this strategy because it would allow her to stay fully invested in her company stock, and avoid large capital gains taxes by not liquidating her existing investments.
Plus, she could even potentially earn dividend income.
Sally now can sleep better knowing that her retirement plan is more secure and that her overall wealth plan is aligned with her family's financial goals.
Borrowing to help you manage investment allocations is just one of the five strategic ways credit can be put to work for you.
Let's start a conversation about credit. Contact Wells Fargo Private Bank to learn more.