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If you have thought about hiring a financial advisor but don’t know where to start, contact me and I would be happy to have a free, no obligation discussion on what kinds of services we can provide!

Moving Your Company’s Stock Tax Efficiently (Net Unrealized Appreciation)

The tax code is littered with little-known rules that apply to only a very small set of people at certain periods of time. These rules, however, can have substantial benefits for those impacted, such as when I wrote about the 83(b) election for individuals joining a company with vesting equity. Today, I am going to discuss a situation that will affect anyone who is currently acquiring company stock as part of their retirement plan. You don’t need to completely understand the rule, but you do need to at least be aware that you have options that could keep thousands of dollars in your pocket and away from Uncle Sam’s donation bin for the careless!

Many employers give their employees stock as a financial perk or allow them to purchase the stock at a 10-15% discount from the publicly traded rate. These benefits are designed to help keep the employee invested in the company’s broad success, beyond their specific role. The hope is that the company stock will appreciate in value at a much higher rate than other investments might. Should you be in the position where you have accumulated company stock and have seen it rise dramatically in value, considering this tax rule is prudent.

The crucial part of this concept is to understand the difference between “ordinary income tax rates” and “capital gains tax rates.” Ordinary income tax rates are the brackets you are most familiar with. These range from 10% to 39.6%. Capital gains tax rates apply to dividends and long term capital gains- these are either 15% or 20%, as the Net Investment Income tax of 3.8% does not apply here. If your income tax bracket is higher than your capital gains tax rate, and your stock has appreciated in value, the NUA election could be for you. 

Tax Rates

Let’s say that several years ago, you acquired shares that amounted to $10,000. This is your cost basis in the stock. Today, it has grown to $100,000. Thus, you have a gain of $90,000, which is your Net Unrealized Appreciation (NUA). Now, you are either leaving the company who holds this stock OR have reached age 59.5. This is also relevant if you are the one inheriting these assets.

Here’s what most people do: they roll it all into an IRA because they do not know about this rule. What that means is that when they take distributions from their IRA, they will pay taxes on the full $100,000 balance at their income tax rate. Let’s call that 33% for today. If we are talking about a retiree who will be slowly drawing this money out for decades, keeping it in the IRA may be the right move as it would enjoy tax-deferred growth.

However, this event can provide an opportunity for some MAJOR tax savings if you intend to use that $100,000 in the near future:


Here’s how it works. When your plan is distributed, you must distribute all assets from all qualified plans at your former employer, not just the one that held the shares of stock. These will go into an IRA. Your company stock will be held in a taxable brokerage account, and you will pay taxes on the cost basis: $10,000 x 33% = $3,300.

Now, that company stock is treated just as if you had bought any other company in the taxable account. When you sell it, you will be subject to capital gains taxes, 15% x the $90,000 gain = $13,500. You could sell this tomorrow, or wait several years, but you won’t pay that tax until you sell the stock. As illustrated above, this move saves you $16,200 in taxes. The NUA election is more attractive if distributions are to be taken in the near future, such as to live off of, buy a home, start a company with, etc.

As with anything, there are many factors to consider when evaluating this maneuver: how long will the money in the IRA be able to grow before a withdrawal is made? What tax rate will apply at that time? If this $100,000 is excess cash to an already established retirement plan, a lump sum today may not be desirable.

Of course, my favorite calculator website, CalcXML, can help you consider several variables when making this decision, but I would not try making this election yourself without consulting a financial planner. Having a second look at your holistic situation is crucial so that you are not forgetting certain factors, such as having enough cash on hand to pay these tax bills!

Your human resources department is not likely to make you aware of your choices, and unless you have an advisor who is trained to watch out for these issues, you could miss out on thousands of dollars worth of hard earned money without ever knowing it. If this situation pertains to you, contact



August 2016 Update From Alex Oliver and First National Corporation

Each month as part of my monthly email newsletter, I weigh in on recent events while also analyzing certain segments of the economy to help simplify the picture for my clients. With the S&P 500 hitting an all-time high in July, I figured this may be a good time to elaborate on some macro trends.

This newsletter includes four sections:

News and Notes: General commentary on the market or on what’s new at First National Corporation, sampled in this post.

July’s Market News: Headlines I have pulled that will recap the previous month.

Key Numbers As Of August 1st: This is a chart covering the Dow Jones, S&P 500, Fixed Income U.S., 30-Year Treasury, 30-Year Fixed Mortgage, and Oil (WTI) to outline levels over the past quarter, one year, and three years.

Recent Blog Posts: A summary of the five most recent blogs I have posted on

If you would like to receive this monthly newsletter, simply visit and subscribe in the right hand column, or email and I will add you to the list. Enjoy!



What a year 2016 has been thus far! After the worst start the stock markets had seen since World War II, while also riding through the volatility waves presented by the presidential election and Brexit, we saw all-time market highs this past month. The S&P 500 is now up 7.66% year to date. In fact, almost all asset classes have produced returns for investors this year: stocks, bonds, REITs, precious metals, etc.

The only drag on returns have involved commodities, weighed down by the persistent drop in the price of oil. Production of oil continues to outpace demand. Iran continues to enjoy a market with less sanctions, fracking in the United States and China have resulted in higher output from fewer rigs, and Russia’s oil dependent economy has been forced to produce more oil than normal to make up for lost revenue, further adding downward pressure on crude oil prices. Hopefully you have been making up for this at the gas pump: prices for regular gasoline currently hover at $2.18 per gallon, compared to $3.65 at this time in 2013.

This leads to the age old question when markets hit all-time highs: how much more can the bull markets run? Valuations seem to be in line with historical averages: the forward price to earnings ratio (P/E) on the S&P 500 sits at 16.6x, compared to a 25-year historical average of 15.9x. This seems to indicate that though the price of the S&P 500 has risen, it has only risen an appropriate proportion to expected earnings. Notably, this measure is not always able to predict future returns. While it was indicative of a recession in 2000 when it hovered in 24x, the forward P/E ratio hovered around 14x prior to the 2008 recession.

One reason for optimism may lie in the amount of cash still sitting on the sidelines. Historically, when you look at the entire money supply, cash accounts have made up 53.4% of it. This might make sense in times such as 2006, when a six month certificate of deposit would generate 5.24% returns. Today, cash accounts are at an all-time high, accounting for 68.9% of the money supply despite six month certificates of deposits yielding just 0.37%!

There can only be one logical explanation for this: fear. Cash accounts rose dramatically in 2009 after the stock market losses from October 2008 through March of 2009 as Americans fled for safety. In 2010, investors dipped their toes back into the water to pick up cheap stocks, but they have been selling off ever since, trying to call the next market crash. In a world where more news is readily available to everyone through their emails, mobile phones, and podcasts, events such as the U.S. debt downgrade, the Greek debt crisis, and Brexit can get blown out of proportion. Thus, we would continue to urge patience. While stock market losses are always inevitable for periods of time, holding cash today would be losing you money due to inflation.

If you have a family member or friend that could use our services, we are always thankful for a referral. Our Generational Portfolio Service (GPS) now allows us the ability to work with accounts of just $5,000 and up, which can be perfect for a retirement plan from a former employer, or cash that should be invested for short-term goals.

As always, do not hesitate to reach out with any questions, and enjoy the remainder of your summer!

Best regards,

Alex Oliver

Getting Started As A Financial Planner

I hate to brag, but I truly feel like financial planning (TRUE, comprehensive financial planning) is one of the more all-around fulfilling professions one could enter. We get to combine the hard knowledge of taxes, investments, retirement plans, and insurance with the soft knowledge of interpersonal relationships with our individual clients. Most people hate thinking about their personal finances- they know there is a wide body of content out there, but they do not know who to trust or which is most relevant for them. I can’t tell you how satisfying it is to work with a family that has a hundred financial puzzle pieces lying around stressing them out, and be able to succinctly put the puzzle together for them and get on a realistic plan toward their goals. There are few people who know know more about our clients than us, as we methodically talk about their goals as it relates to where they are today to get them on a reasonable financial plan.

When you combine the ideas that people generally hate managing their finances, that the added value to the client has been quantified, and the baby boomers are now retiring with U.S. household worth setting record highs, you can understand why personal financial planners routinely end up on the “fastest growing” and “best jobs” lists.

Additionally, the profession is flexible enough for a financial planner to run their business to suit their own desires. You could run your own business with no employees, picking a number of clients and income level you are comfortable with. You could work in a mid-sized firm like First National Corporation, sharing resources with other advisors based on your unique areas of expertise. You could also build out a niche clientele, such as focusing on certain age groups, professions, or levels of wealth.

The frustrating part about entering the profession is the perceived set of requirements up front. Most individuals looking to become a holistic financial planner think that the only entry level opportunities are found at insurance institutions or banks. They find job openings that have zero or low starting salaries, where they have to sell commissioned products in order to make a living that may not best suit the clients they face. From day one, they are encouraged to push products to their friends and families. A staggering amount of advisors do not make it past 5 years in the profession as they get exhausted from having to meet sales quotas every week. With the new fiduciary rule, this may start change, but that remains to be seen.

Having had a fee-only financial planner as a mentor when I was 15 years old, I knew there was a better way, and I would like to take the time to point aspiring financial planners to the appropriate resources and save you the headache. With only 4% of Certified Financial Planners under the age of 30 and 22% under the age of 40, the profession is starving for new planners to replace the retiring baby boomers. Even more so, only 23% of ALL CFPs are women! If you enjoy numbers and people, follow these steps to a rewarding career.

Learn About the Industry

Before you quit your job and decide to invest years of your life into this profession, I would take the time to learn from financial planning’s leading voices. The first thing you need to do is visit and sign up for his newsletter. You could call him the “blogfather” of financial planning: he has an alphabet soup of designations while serving as a co-owner for several financial planning companies. He will keep you up to date several times per week about the latest trends in financial planning.

I am a big podcast listener on my drives or runs. XYPN Radio has had a major influence on me, as it is a group that focuses on Generation X and Generation Y advisors and clientele. Belay Advisor’s Steve Sanduski is also part of my regular stream. Both can be found through the podcast application on your respective mobile phone.

I would also encourage you to register as a student for the Financial Planning Association (FPA). Meetings are typically held once every two months, though special workshops and speakers will come through as well. Their annual meeting in your respective state is bound to blow you away the first time you attend. They also have a growing NextGen segment for advisors under the age of 36 that you can network through and learn from.

Finally, for a general introduction to the industry, I would recommend these three books:

The One Page Financial Plan: Carl Richards

Behavioral Investment Counseling: Nick Murray

Getting Started As A Financial Planner: Jeffrey Rattiner

Qualify Yourself to Give Financial Advice

I have good news and bad news: the requirements to become a financial planner are very, very low. There is one exam you need to pass in order to legally give advice, and that is the Series 65 exam. While there are other licenses out there that allow you to sell certain investment products for a commission and require you to be sponsored by a financial institution, the Series 65 license is all you need to provide advice on a non-commission basis. While I wouldn’t call this a difficult exam, I wouldn’t take it lightly either. While the financial concepts will not be difficult if you graduated with a finance degree, you will have to learn several advisor-specific laws and regulations for this exam. I used the textbook and 1,000 question test bank from Pass the 65.

Even though I rarely use this since I typically recommend term life insurance only, I chose to also obtain a life, accident and health insurance license. I used Kaplan University for my prep materials, but these were woefully out of date in some cases and I’m not sure I would have passed if I were not already taking the insurance course as part of the CFP® curriculum.

To recap, to be a fee-only advisor, a Series 65 license is all you need. If you would like to sell products, there are additional licenses to obtain. The good news is that you can easily enter the profession; the bad news is that thousands of people can call themselves a “financial planner” without having to jump over many hurdles. This is where you must take additional steps to differentiate yourself.


The CFP® designation is now recognized as the most respected designation held by qualified financial planners. Out of 250,000 financial advisors practicing in the United States, only 75,000 hold the CFP®  designation. I would suggest enrolling into these courses immediately. I took all of my classes in person through UCLA, which I would strongly recommend if you have an institution close enough to you. The in person classes will provide the opportunity to ask questions and network with peers for your first position. For online courses, I have heard strong reviews for the College For Financial Planning and Boston University. You can search for local institutions using the CFP® website. All in, I was able complete these courses and the exam itself for less than $10,000.

While each program may vary slightly, my eight courses included:

Survey of Personal Financial Planning

Financial Analysis


Income Taxation


Estate Planning

Pension and Other Retirement Benefit Plans

Capstone in Financial Planning

The first seven involved specific information regarding each topic, structured as a normal classes with quizzes, homework, tests etc. While the investments class was easy for me due to my undergraduate career, estate planning and retirement plans proved to be tougher. The difficulty of the course will largely depend on your background and areas of interest. The capstone class brings it all together, where you will combine tests with comprehensive financial plans. This is by far the most challenging class. We started out writing simple financial plans on our own that would consist of 10-20 pages of content, and by the end of the class, we formed three person groups to write 100 page financial plans. As you can imagine, the case studies got much more complicated, involving more of the content from the core classes.

Once those classes are completed, you are qualified to sit for the CFP® exam. Though you need 2 or 3 years worth of experience to call yourself a CFP®, you do not need it to sit for the exam. This exam is very difficult, and everyone uses a prep program. I went with Dalton due to their 4 day, 10 hours each day, in-person review in downtown Boston, along with their extensive online test bank. 

Once you pass the exam, your learning has not finished! You will be required to log 15 continuing education hours per year with the CFP Board to prove that you are staying on top of new trends and changes in law. With the CFP becoming the baseline designation for new advisors, you will want to also consider picking up other designations based on what you want to specialize in. Kitces writes a great blog here about some you may consider, but this is not an all inclusive list. For instance, I have the CRPS designation on my radar due to our involvement in managing 401(k) plans at First National Corporation.

Finding Your First Job

Once you have spent one to two years completing the above, you should be able to leap frog the commission sales world into a salaried associate position. Again, keep in mind how many RIAs (independent advisory firms) have owners who are ages 50-60, and how few CFP’s there are to choose from. They need young, educated financial planners to groom as a succession plan for when they retire. They also may not be adequately serving the younger, less affluent clientele due to their increasing size. Complete everything I have outlined, and you should not find an issue.

I used two financial planning specific job boards from the CFP Board and the Financial Planning Association. The positions posted in these two places are monumentally better than what you will find elsewhere. Luckily, these are both relatively new in the last two years and have really gained steam with how many jobs are posted. I would also encourage you to visit New Planner Recruiting, which serves as the intermediary between financial planning firms and new financial advisors. This firm will actually give you a written test and ask you to complete a financial plan to prove your competence to prospective employers. Just for that experience, it is worth signing up. I will say that they were not able to locate any positions for me in my geographic preferences, so be sure to diversify where you look.

There are a wide range of roles that you may find, from serving as an associate financial planner that creates the financial plans from a meeting, to a marketing position where you conduct educational seminars, to an investment research focused to position, or even a full fledged financial planner position where you will be working with your own clients on day one, which is the position I ended up matching with. I would peruse these job boards for at least 6 months prior to sending out resumes to get a sense of what is out there. The more you know, the better you will be at declining certain positions while positioning yourself for the best fit.

In Conclusion

I can’t say it enough: being a financial planner is an awesome career for the person who likes managing money and learning about investments and taxes, while empathizing with the family who is trying to balance a hundred priorities with their big picture financial goals. Once you bring in a client, it is fairly rare for them to leave you once they see the value of having a financial planner in their life. Once you become a financial planner, a TRUE financial planner, I think it will be a profession that you stick with up to, and possibly through, your own retirement!