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The Wealthfront Single-Stock Diversification Service

Available exclusively to Twitter and Facebook employees, ex-employees, & investors.

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Diversify Your Single-
Stock Position
Pay No Fees and
No Commissions
We'll Trade Every Day
So You Don't Have To
Every Sale Optimized
for Lower Taxes

Is a large portion of your net worth tied up in a single stock?

Having a large portion of net worth in a single stock means that you can experience extreme fluctuations in your net worth on a daily basis. You're also constantly exposed to risk based on the activities and unforeseen events that occur at your company.

The Wealthfront Single-Stock Diversification Service helps with this issue by allowing you to transfer your stock holdings to Wealthfront, where they can be sold in an easy, commission-free, and tax-aware manner. Once taxes and short-term needs are set aside, the sales proceeds are invested in a less-volatile Wealthfront diversified portfolio that is suitable for your long-term needs.

Worried about selling at the wrong time or on the wrong day?

It’s impossible to time the market, and no one can predict the future price of a recently public company. That's why the Wealthfront Single-Stock Diversification Service can sell your stock gradually and consistently, selling some shares as often as every single day that it's allowed to trade. As a result, you're less likely to sell a big portion of your stock when the stock price is low and more likely to sell on days when the stock price is high.

We'll build you a personalized selling plan

What about taxes?

The sale of your single-stock position can come with a hefty tax bill. That's why the Wealthfront Single-Stock Diversification Service will set aside cash to cover your expected tax bill on every single stock sale. The service will also attempt to minimize your taxes by carefully choosing which shares to sell first and by employing other Wealthfront services like Daily Tax-Loss Harvesting and the Tax-Optimized Direct Indexing.

Cover your short-term needs but invest for the future.

The Wealthfront Single-Stock Diversification Service helps with both your short-term and long-term needs. Start by selling some stock upfront to pay off your debts or cover that house, car, or vacation you've always wanted. Then, we'll help you determine the right schedule to sell the rest of your shares and invest the proceeds in a Wealthfront diversified portfolio suitable for your long-term needs.

Wealthfront's offer to provide services for the employees and investors of Twitter and Facebook does not mean, and should not be taken to suggest, that there is any partnership or other relationship between Wealthfront and Twitter or Facebook. The Twitter and Facebook logos are registered trademarks of Twitter Inc. and Facebook Inc. respectively.

Diversify My Shares

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Additional IPO Resources

Common Questions

Why can't I just sell my single-stock holding on my own? What does the Wealthfront Single-Stock Diversification Service do differently from what I could do myself?

The Wealthfront Single-Stock Diversification Service provides several capabilities that are not easy to replicate on your own:

  1. Your stock is sold commission-free. With Wealthfront you'll never pay commissions or other fees to diversify your single-stock position. Most traditional brokerages will charge a minimum of $6-$9 per each such trade, which can add up to a big bill when you plan to sell gradually and on a fixed schedule.
  2. Your stock is sold gradually and consistently, sometimes as often as daily. The Single-Stock Diversification Service attempts to sell your stock on every single day that it can over the course of your overall selling plan (subject to blackout windows and other restrictions). Selling gradually in this manner means that you're unlikely sell a big portion of your single-stock position on exactly the wrong day (such as when the stock hits a temporary low point). That's fairly difficult and inconvenient to accomplish on your own.
  3. We ensure that your taxes are covered. The Single-Stock Diversification Service automatically sets aside any cash needed to pay taxes and cover short-term financial needs. You're unlikely to have an unexpected debt to Uncle Sam by using this service.
  4. We redeploy your funds into a long-term diversified portfolio. The Single-Stock Diversification Service automatically reinvests your after-tax sale proceeds in a Wealthfront diversified portfolio based on a risk level that's appropriate for you. By using the service, you'll never miss the opportunity to invest in your future by holding a significant portion of your proceeds in cash.

The Single-Stock Diversification Service is free and provides an unparalleled level of automation and convenience. Just set-up your plan, transfer your stock and you'll rarely need to think about it again.

How much does Wealthfront charge to schedule and execute the sale of my stock? How much does it cost to have the proceeds invested in a Wealthfront diversified portfolio?

Selling your single-stock position is completely free. We charge no commissions or other fees on the single-stock being diversified through the service.

We also charge no fees on any cash set aside to cover your tax bills or your short-term financial needs.

After-tax proceeds that are reinvested in a Wealthfront diversified portfolio will be charged our usual advisory fee of 0.25% of managed assets annually on amounts over $10,000. The only other fee you incur is the very low embedded fee in the cost of the ETFs you will own as part of your diversified portfolio (averaging 0.15%). Wealthfront charges no trading commissions or other account fees to manage your portfolio.

If I decide to use the Wealthfront Single-Stock Diversification Service, how “locked in” am into Wealthfront?

Your Wealthfront Single-Stock Diversification Plan is flexible. You can pause, update, and restart your selling schedule as needed. The cash generated for taxes or short-term needs can be withdrawn at any time. Even the diversified portfolio that your proceeds are reinvested in can be liquidated or moved to another brokerage account, as you desire.

Is the Wealthfront Single-Stock Diversification Service the same as a 10(b)5-1 plan?

The Wealthfront Single-Stock Diversification Service is not a 10(b)5-1 plan. However, if you are required to use a 10(b)5-1 for the sale of your stock, you can still create a selling plan using Wealthfront Single-Stock Diversification Service and give it to your 10(b)5-1 administrator to implement on your behalf.

What kind of stock selling plans are available with the Single-Stock Diversification Service?

The easiest way to see the selling plans that are available with the service is to begin the Single-Stock Diversification Service enrollment process. You can review all the plans available without any commitment to transfer your stock.

In general, the available selling plans allow you to pick between two elements:

  1. How much you'd like to sell upfront to cover any short-term financial needs or to quickly reduce your risk level
  2. How quickly you'd like to sell the remainder of your stock in a gradual and consistent manner (including future vesting and additional grants).

We believe that such plans — an initial sale of some stock followed by a gradual sale of the rest over months and years — provide the best approach when dealing with a large single-stock position. These approaches have been used for decades by venture capital investors and are the traditional approaches used by public company executives to sell their company stock.

Note that if you require finer controls over the selling process (such as, picking the exact date and time for each sale), the Single-Stock Diversification Service will likely not meet your needs. We specifically built the service to offer the type of plans we believe best deal with a large single-stock position, rather than enabling the ability to place arbitrary stock selling orders.

In general, the available selling plans allow you to pick between two elements:

  1. Strategies For Selling Stock Post-IPO
  2. Winning VC Strategies To Help You Sell Tech IPO Stock

What about taxes? Is the Wealthfront Single-Stock Diversification Service going to minimize my taxes?

Depending on the type of shares you’re selling, and the time horizon of your sales, you could be looking at a significant tax bill. The Wealthfront Single-Stock Diversification Service will try to help.

Within the context of your selling plan, Wealthfront will attempt to minimize your tax bill by prioritizing sales of shares that trigger the lowest taxable gain or are taxed at favorable rates (e.g. the long-term capital gains rate).

Furthermore, Wealthfront will set aside enough cash proceeds from each stock sale to cover the expected taxes owed. The amounts set aside for taxes will be based on the state you are taxed in, and the type and amount of shares being sold. This way, you are never caught with an unexpected tax bill.

What's more, the diversified portfolio in which your proceeds are invested will also use Wealthfront's Daily Tax-Loss Harvesting service and our Tax-Optimized Direct Indexing to attempt to generate harvested tax-losses that could further reduce your tax bill.

However, those approaches are only a subset of the things you can do to minimize your tax bill. As a result, we strongly recommend that you work with a tax accountant to determine additional steps that you should take to minimize your taxes.

Is the Single-Stock Diversification Service officially endorsed by Twitter or Facebook?

The Single-Stock Diversification Service is currently offered by Wealthfront exclusively to Twitter and Facebook employees, ex-employees, and investors. However, this service is not officially endorsed by Twitter or Facebook's management.

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