Find Financial Advisors for Lowe’s Employees & Executives: Q&A Insights from the Experts

When I work with clients with Fortune 500 holdings from their employer, I sound like a broken record to hammer home the point that we need to review all the information available to ensure that you make the best choices in what can be a unique situation. Sure, Fortune 500 companies employ over 28 million people worldwide, but the benefits from one company to another can vary substantially and even within companies due to different compensation plans.

We will work with your HR department to request the relevant plan documents and read into the details. This is the first step to understanding our clients’ options because the best route forward may be different from the one you heard from your buddy during a team-building session.

As a financial planner and investment advisor that has had the opportunity to work with prior Lowe’s Companies employees, I have been able to share some of my experience working in the trenches of net unrealized appreciation trustee-to-trustee transfers and rollovers to help reassure employees and retirees alike that they are making the right financial decisions to help decrease their tax liabilities and improve the position of their portfolios in a personalized retirement income plan.

If that comes across as sounding like another language that you do not want to learn, trust that we can help employees of all departments from all walks of life learn how to retire with a plan to pay less in taxes and maximize enjoyment. We are detail people, here to help you focus on the details important to you and leave the others for us.

Whether we are working with clients that are typically eligible for cashout rollovers and in-kind transfers, or executives, directors, or highly-compensated employees that are still employed and may have more restrictions, we take the time to understand all the options inside their employer-sponsored plans, including supplementing their current income with dividends from employer stock or diversifying their asset allocation to offset some of their concentration risks.

Employees with more than 5% of their investable funds in employer stock are absolutely taking on concentration risk – a risk that is two-sided and has a wide range of outcomes like generational wealth or financial ruin. It can help to have a professional that understands the potential risk and reward of managing concentrated stock positions; we are here to help clients manage these risks within their overall financial plan.

We feel it is vital to understand not only the traditional risk & return trade-offs but have a solid understanding of what “off ramps” are available to help de-risk a portfolio while minimizing tax drag & costs. Knowing that not all of our clients are trained accountants, we will work to demystify the tax code’s secrets which are rich with opportunities to create meaningful wealth.

We can also help create a portfolio using our proprietary asset allocation software to help you build a complementary portfolio to a concentrated position. If you need help making portfolio investment decisions and want to hang on to your hard-earned employer stock – we can help.

Working at a Fortune 500 company means your stock is publicly traded. For employees and retirees of a company like Lowe’s Companies, their stock has not only been trading for decades but has had a growth rate significantly better than the S&P 500 for longer-term shareholders.

When employees use their 401(k) plan contributions or employee stock ownership plans to purchase employer stock, they might be chastised as putting “too many eggs in one basket” and risking their future income & investments should the employer go under. Of course, that is a risk, but if mitigated and accounted for, the benefits of being able to purchase employer stock at a discount or on a pre-tax basis can be significant.

We wouldn’t advocate throwing everything you’ve got at employer stock to maximize the advantages in the tax code – we want clients of Lowe’s Companies and other publicly traded companies to know of the unique ways that the tax code treats the investment in your employer differently and make an informed decision. Employees typically misunderstand this process until they meet a knowledgeable and experienced investment advisor and financial planner who can competently explain it in a number of ways.

If you are shopping for a financial advisor to help you consider your options, ask if they are a fiduciary with experience with “net unrealized appreciation” and see if they squirm. To help ensure that a client of Lowe’s Companies or any Fortune 500 company gets the proper due diligence on their employer-sponsored plans, look for a Certified Financial Planner professional that can calmly and clearly explain how the net unrealized appreciation tax treatment works.

This is especially important to long-haul employees or director-level employees of Lowe’s Companies. The return on stock earned as compensation or purchased even five years ago are substantial compared to the S&P 500, and even throughout the Coronavirus pandemic, the stock had strong returns. In addition to asking potential financial advisors how to exit your positions, ask them their thoughts on holding on to the positions as part of a diversified portfolio, even if it means taking on some concentration risk.

The rates of return on company stock held over the course of a career, as compared to a more broadly-diversified index like the S&P 500, can be jaw-dropping. For example, since 2000, the S&P 500 has returned between 7% and 8% annually, depending on how you have it measured; Lowe’s Companies has returned almost double that! Too often, concentration risk is viewed as one-sided – high risk of loss – and the risk of gain is disregarded.

The possible gains from concentrated stock investments compounding can produce wealth that can be spread over generations. Though historical returns do not guarantee future performance, there is often a greater chance of long-term gains than losses in a concentrated position held over the long-term.

If you choose to take the risk with an appropriate amount of your asset allocation, you likely can avoid losses that would derail a financial plan while simultaneously taking the chance to finance what could be a once-in-a-lifetime opportunity if those returns do materialize.

Director-level employees and highly compensated professionals at Lowe’s Home Improvement typically receive substantial stock as bonuses or deferred compensation. Reviewing the features and benefits of these stock bonuses and deferred compensation plans requires a methodical approach and experience with the edge cases of tax planning in order to distill pearls of wisdom for clients to make their retirement goals a reality. We use a variety of software programs and custom projections to perform scenario analysis and better stress test retirement income strategies.

Clients with non-qualified deferred compensation agreements, stock bonus plans, or large holdings of their company stock need to approach financial planning with an expert of experts at their side to help ensure that they navigate the retirement landscape, avoiding unwelcome surprises while taking the once-in-a-lifetime opportunities. Net unrealized appreciation (NUA) is one of these you-gotta-know items – if you take a distribution you might unwittingly destroy your NUA opportunity for years before having the opportunity for NUA potentially re-open at 59 ½.

We encourage clients to “measure twice and cut once,” an analytical and detailed approach that starts with education. This education can help clients avoid unknowingly missing out on a tax opportunity like net unrealized appreciation or even a plan investment option that is spelled out in the plan documents, which if used correctly, could help a client better diversify their portfolio and protect their retirement nest egg.