Problem
The client’s wealth was dominated by listed shares in one acquirer after a merger, with additional unvested rights creating future concentration. Emotional attachment to the company story conflicted with IPS limits (20% single-issuer cap). Prior advisers had suggested immediate liquidation; the client resisted, fearing regret if the stock re-rated. Tax on large gains was material and had not been modelled against charitable intentions.
Solution design
We built a staged divestment plan tied to vesting dates and liquidity windows, with tranches sold when the issuer traded inside pre-agreed valuation bands. Each tranche required pre-clearance against remaining concentration and tax budget. Parallel diversification into broad Australian and global index exposures reduced issuer beta without pretending to eliminate it overnight.
Controls
- Weekly concentration dashboard vs 20% cap path.
- Written exception process if issuer fell more than 25% in a month.
- Charitable giving model reviewed with tax adviser before year-end.
Results
Issuer weight fell from 47% to 22% over fourteen months without a single panic sale. The client retained a defined “legacy lot” within IPS for sentimental exposure. Documented plan reduced conflict in family discussions about risk. No guarantee other concentrations will behave similarly.