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To: The AI employee at the center of a defining wealth-creation moment
From: An independent wealth manager
Re: The sales people are at the gate - before the pitch decks arrive
What is happening in artificial intelligence today is remarkable. In the Bay Area especially, we are living through one of the most consequential technology shifts of our lifetimes. Since 2003, we have operated as a single-office firm in San Francisco, advising clients through multiple technology cycles and the planning challenges that emerge when professional success becomes personal wealth. Even against that history, the current AI moment stands apart: a rare convergence of innovation, talent concentration, company formation, and wealth creation.
For many AI employees, the implications now extend well beyond the workplace: career success is becoming personal wealth. This cycle has its own features too: unlike prior technology waves, liquidity is not necessarily arriving as a single IPO event years in the future. It is arriving in installments - through tenders and secondaries at six- to eighteen-month intervals, often at rapidly rising valuations.
That makes planning both more urgent and more complex. A secondary sale, tender offer, IPO, or acquisition does more than convert paper wealth into cash. It changes the architecture of a financial life.
And almost immediately, the pitch decks will arrive.
You are now entering an ecosystem where nearly everyone will have something to sell you. New liquidity attracts attention, and offers arrive quickly. Private banks may lead with balance sheet access, brokers with structured notes, asset managers with “institutional access”, insurance specialists with newly identified needs, and advisors with the argument that ordinary advice is no longer sufficient. Each will come with a solution, a strategy, or a product.
Some of the ideas may be useful. Many will be unnecessary. A few may actually be harmful. The first task is not to find the most sophisticated product; it is to build a decision-making framework that keeps “sophistication” from becoming a euphemism for someone else’s economics.
Before anyone starts selling solutions, get clear on the questions that matter:
Before choosing investments, structures, or strategies, start with the harder question: who should be trusted to help make those decisions?
Begin with incentives - at the advisor level and the firm level. The cleanest advisory relationship is one where compensation is transparent, advice is fiduciary, and the firm’s economics do not depend on manufacturing, financing, distributing, or placing the products it recommends.
Independence is not valuable because it sounds virtuous. It is valuable because it reduces conflicts of interest. The point is not that conflicted advice is always bad; it is that incentives shape recommendations.
Real estate agents, for example, often behave differently when selling a client’s home than when selling their own1. Medical professionals may also recommend different procedures when compensation varies by treatment2. Financial advice is no different. Before accepting a recommendation, you should understand not only whether it is technically sound, but also how the person and firm recommending it are paid. A talented salesperson can make almost any investment sound attractive; incentives help explain which investments get recommended in the first place.
The question is not simply whether an advisor is smart or well credentialed. It is whether the business model behind the advice is built for judgment, planning, and service - or for asset gathering and product placement.
A practical first step is to ask every prospective advisor to put the economics in writing. That disclosure should be detailed in plain English: what you pay the advisor, what you pay underlying managers or funds, what custody or other costs may apply, whether referrals or private-fund placements generate compensation, and whether the advisor or any affiliate receives revenue from products, cash, lending, or investments recommended to you. If the answer is hard to obtain or hard to understand, consider that a red flag.
The right advisor should advise across the full balance sheet, not just the portfolio - bringing perspective to concentrated stock, equity compensation, liquidity events, tax-aware implementation, charitable planning, estate coordination, and cash management.
That expertise should be specific, not merely branded. Nearly every wealth firm is now building an “AI client” practice, but a label is not the same as fluency. Generic high-net-worth advice is not enough if the advisor does not understand the mechanics of your situation: double-trigger RSUs, company tenders and third-party secondaries, QSBS stacking, refresher grants tied to moving reference prices, 10b5-1 plans, and the planning differences between a single IPO and a sequence of private liquidity windows.
Anchoring on the initial wire amount is understandable, but it can be misleading. The more relevant figure is after-tax, after-exercise wealth: what remains once shares have been exercised, taxes have been reserved, and the full balance sheet is understood.
That requires an inventory of what you own, what you owe, and where your risk is concentrated: stock, RSUs, options, retained shares, tax basis, holding periods, vesting schedules, transfer restrictions, liabilities, future grants, and career capital.
For AI employees, concentration is not just a portfolio question. Your equity, compensation, future career opportunities, professional network, and even the market value of your skills may all be tied to the same underlying factor: the continued trajectory of frontier AI. Your company may become one of the defining companies of this era, but that does not make an undiversified portfolio prudent.
The better question is not, “Do I believe in the company?” It is, “How much exposure lets me participate meaningfully, and how much would jeopardize the rest of my life if the outcome disappoints?”
I will sell when it feels “right” is not a plan. It leaves too much to market movement, regret, and peer psychology - and it compounds across multiple liquidity windows, not just one. A better approach is to decide in advance how much exposure is appropriate, what should be sold overtime, what should be retained for upside, what should be reserved for charitable giving or gifting, and how future liquidity windows will be handled.
Only then should the tools enter the conversation. Staged sales, direct indexing, exchange funds, collars, charitable vehicles, QSBS planning, long/short tax-loss harvesting, and other strategies can all be useful in the right circumstances. But each comes with trade-offs: cost, complexity, illiquidity, counterparty exposure, reduced flexibility, and dependence on a manager.
The right sequence matters: first the plan, then the tools.
Newly liquid investors are often pitched more complexity than they need. Complexity can sound alluring, especially when wrapped in institutional language, elegant analytics, and promises of tax efficiency. But complexity should earn its place in the plan rather than be the default. Anything presented as both sophisticated and broadly suitable deserves scrutiny.
Tax-aware long/short direct indexing is a good example. These strategies - 130/30, 145/45, 200/100, or similar extension strategies - seek to maintain equity exposure while harvesting losses from both long and short portfolios. For investors with large, recurring gains, the tax deferral can be meaningful. They are being marketed aggressively to AI employees right now because the profile is attractive to providers: large, realized gains, the possibility of future gains, concentrated stock exposure and recurring tax-management needs. But leverage introduces financing risk, short positions create borrow costs and availability constraints, and tax deferral is not tax elimination. These strategies can also be very profitable for the providers, sticky, and difficult to unwind.
Before committing significant dollars, three key questions matter. What will it cost - including advisory fees, manager fees, financing costs, borrow costs, and trading costs? What does the unwind look like, and how long could it take to regain flexibility? And do you expect to consume any of this capital for taxes, lifestyle, housing, philanthropy, family support, or future opportunities, and if so, when?
For the right client, sized correctly and understood clearly, these strategies can be useful. For the wrong client - or at the wrong size - they can create more complexity, fees, and friction than value.
This is a good example of where the plan should come before the tool. The analysis should not start and end with whether a strategy can generate tax losses. It should ask whether the strategy actually works in service of your broader objectives. A strategy can be technically sound and still be wrong if it solves a narrow problem at the expense of the larger plan.
Before making decisions with your capital, pause long enough to understand how the advice you are receiving is being formed. The right advisor should be able to translate your facts into a coherent plan -without turning the conversation into a product menu.
The strongest advisor may not be the one with the most elaborate pitch. It is often the one who reduces complexity where possible, asks better questions, makes fewer assumptions, explains conflicts clearly, and describes the tradeoffs behind every recommendation.
You already took the concentrated risk - and won. The work now is to preserve choice, build durability, and make sure your wealth serves the life you want it to support.
Sincerely,
Baker Street Advisors
