As employer equity becomes an increasingly prominent compensation benefit for wealthy Americans, former Schwab and Morgan Stanley executive Brian McDonald is focused on bringing equity compensation to the forefront of wealth planning between financial advisors and their clients.
McDonald's startup, Grantd, has raised $5 million with investments from Edward Jones Ventures, Dynasty Financial Partners, and TIFIN Studios to help expand the company's software across the advisor channel to serve their clients with equity from both private and public companies.
"Almost every public company has an equity account plan for their employees, and the overall TAM for the industry, vested and invested, is $4 trillion," McDonald told InvestmentNews. "It's this super important thing to RIAs and their advisors who serve clients that have equity, as well as the traditional wealth firms, we want to be able to power the advice delivery on equity compensation across the industry."
McDonald's aim is to make advisors as well-versed on equity compensation for their clients as they are on other employee benefits such as 401(k) plans. Grantd provides tax optimization on equity plans as well as a forfeit value calculation feature for clients considering leaving their jobs.
"It will tell them the forfeit value, which if an individual is working at Meta and she's thinking about going to Google, how much in equity compensation is she leaving on the table if she leaves today because it's unvested or if it has more time value in the options that she'll leave behind," said McDonald. "Or said differently, it helps the advisor tell her what we need in replacement value in an equity from the firm you're going to to be able to make sure that you stay whole from that standpoint."
Advisors on Grantd can guide clients who might be overly tied to their employee equity plans, with McDonald saying he often sees some employyes either 60% to 80% of their net worth tied to employee stock.
"The more senior you get, obviously, the bigger part of equity is, and that's when some of the more complex things come in, like the need for advisors to help these clients with 10b5-1 plans so that they can make sure they're controlling for rule 144, and insider trading and so the needs become complex and RIAs as well as traditional wealth firms should engage in helping their individuals who have this equity comp."
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