Conquering Your First IPO - Kerr Financial
Estate & Trust
Conquering Your First IPO
Category: Estate & Trust, Financial Planning, Investment Management Tags: integrated wealth management, investment management, Tax, wealth management

Conquering Your First IPO

Congratulations, it’s finally here! The tech start-up you’ve been working so tirelessly for is about to go public. While this is an incredibly exciting time for you, we imagine you might also be feeling a little overwhelmed. The financial decisions and actions involved in navigating your first IPO can certainly seem complicated. If you suddenly find yourself with a large windfall in the aftermath of your company’s IPO, arming yourself with information to make sound decisions will be fundamental in effectively managing your newfound wealth, as well as avoiding common pitfalls. Partnering with experienced financial professionals will provide you with the support you need to protect your wealth and maximize your returns long after the IPO takes place. So have no fear. Let’s build your team of experts.

A Tax Accountant

The first thing you will want to do is hire a tax accountant, preferably one who specializes in IPOs and equity ownership structures. Before the IPO, taxes may have simply meant filing a personal income tax return every April, and perhaps some quarterly tax instalment payments. However, with stock options and equity ownership now in the mix, you are not just filing annual returns – a strategic tax plan is what you covet. Furthermore, there are many different types of equity compensation, such as restricted share units (RSUs), deferred share units (DSUs), performance stock options (PSOs), share appreciation rights (SARs) and employee share purchase plans (ESPPs), to name a few. Each of these compensation forms can come with their own vesting schedule and tax treatment. Furthermore, there are important and nuanced tax strategies involved with selling shares and exercising options – the amount, timing, kind of equity, capital gains situation, and so on. A tax accountant will help you navigate all these complexities and more.

A Financial Planner                                                                                 

The next step you will want to take is hiring a financial planner who you connect with, who can walk you through this IPO journey, translate the complexities for you, understand your needs, and build you a financial plan of action. Not only will your financial planner develop a personalized and comprehensive plan to help you achieve your goals, they will assist with its implementation and monitor your progress, in order to ensure the recommended steps are successfully achieved. Common topics you will address include budgeting and cash flow management, education funding, retirement planning, tax minimization, charitable giving, risk management, and insurance.

An Estate Lawyer

You will need an estate lawyer to help you build a plan for where you want your post-IPO wealth to go if something happens to you. While it may be difficult to think about financial planning that you will not benefit from in your lifetime – hiring an estate attorney means that you, and not the government, get to control what happens to your newfound wealth. You will work together to establish or update your will, create a power of attorney, and appoint an executor of your estate. Besides drafting and implementing legal documents, an estate lawyer can help you establish important financial structures, such as trusts and foundations.

An Investment Advisor

Whether you were a stock market neophyte or expert pre-IPO life, hiring an investment advisor to construct an individually-tailored, tax-efficient investment portfolio – one that incorporates your financial goals, timeline and risk profile – will be instrumental at this time. Their primary focus will be to build a well-diversified investment portfolio for you, designed to provide attractive risk-adjusted returns over time. They will routinely monitor your portfolio as well as perform due diligence on new investment ideas across numerous asset classes. Hiring an advisor who works at a registered Portfolio Management firm is highly recommended, as Portfolio Managers have a legal obligation (ie. a Fiduciary Responsibility) to act in good faith as well as in the best interests of their clients.

Ideally, the professionals you will partner with to navigate your first IPO will all work together under one roof. Comprehensive wealth management firms such as Kerr Financial understand the importance of having your professional advice integrated, so that strategies work together and not against each other, in order to achieve your goals as well as protect and grow your wealth, long after the big day takes place.


Kerr Financial

About Kerr

Kerr Financial Group was formed in 1979 for the purpose of assisting individuals to maximize their personal financial resources, alleviate their financial and retirement concerns and simplify the administration of their affairs.

Resources & Articles

Montreal Office Kerr Financial
1 Place Ville Marie, Suite 1680
Montreal, QC, H3B 2B6
Tel: (514) 871-8213
Fax: (514) 393-9516

Get Directions
Toronto Office Kerr Financial
150 York Street, Suite 1212
Toronto, ON, M5H 3S5
Tel: (416) 364-9447
Fax: (416) 364-0892

Get Directions