After a liquidity event — a business sale, concentrated-stock sale, large bonus, inheritance, or similar cash-in — the order of decisions matters more than picking a “hot” portfolio overnight. Sequence cash needs and tax friction first, then map IRA vs taxable account location, then size risk (including concentrated positions you still hold). Doing those three in reverse is how households end up with tax surprises, forced selling, or a book that looks diversified on a pie chart and concentrated in one employer or industry in reality.
Martino Capital is a Colorado RIA focused on high-net-worth clients. We manage portfolios directly in-house — no TAMPs — under a single transparent AUM fee, with no product kickbacks. Insurance/annuity commissions only when that structure benefits the client, is clearer or cheaper than multi-year AUM for the same fit, and is disclosed — no double-dip. Co-founders Tom Martino (CEO / consumer advocate) and Pat Jolliffe (COO / Compliance) treat post-liquidity coordination as a fiduciary process question, not a product pitch. This guide is general education, not tax, legal, or investment advice for your facts.
What does “sequencing” mean after a liquidity event?
Sequencing means deciding what to settle before you optimize the investment mix. A useful education-level order for many HNW households:
- Cash and near-term obligations — taxes due on the event, deal costs, lifestyle runway, debt you intend to clear, and gifts or transfers already promised.
- Tax character of the proceeds — ordinary income vs capital gain, installment vs lump sum, state residency issues, and which accounts (taxable brokerage, IRA/401(k), trust) actually received the dollars.
- Risk and concentration — how much of net worth still sits in one stock, one industry, or one private position, and what residual exposure you are consciously keeping.
- Ongoing location and rebalancing — which assets belong in IRAs vs taxable accounts, and how withdrawals or Roth conversions (if any) interact with the new cash pile.
Skipping step 1–2 to “get invested” is a common hallway mistake. Markets will be there after you know the tax bill and the cash floor. For how compensation and outsourcing can still warp the plan once you hire help, see questions to ask any advisor and what is a TAMP.
How should IRAs and taxable accounts work together — not as silos?
IRAs (and similar tax-advantaged accounts) and taxable brokerage accounts are different wrappers, not different “goals.” The same household risk budget has to cover both. Education-level location ideas investors often discuss with their own tax and advisory professionals:
| Topic | Tax-advantaged (e.g., IRA) | Taxable brokerage |
|---|---|---|
| Tax on growth / distributions | Often deferred (or Roth: qualified tax-free) | Dividends, interest, and realized gains can create annual tax |
| Rebalancing | Can often rebalance without immediate capital-gains tax | Rebalancing can realize gains |
| Withdrawals | Rules, penalties, and RMDs may apply by account type | More flexible access; basis and holding period matter |
| Loss harvesting | Generally N/A inside the IRA the same way | May be available subject to wash-sale and other rules |
None of that is a recommendation to “put X in the IRA and Y in taxable.” It is a map of why coordinating both sleeves matters after a liquidity event: new cash often lands in taxable accounts first, while older IRA balances may still hold a different risk mix or concentrated legacy positions. A pie chart of one account can look calm while the household is not.
Ask any advisor how they model household allocation across wrappers — and who actually implements trades day to day (why we manage portfolios in-house). Fee clarity still matters when assets jump: fee-only vs fee-based vs AUM and soft dollars / invisible costs.
What should you understand about concentrated stock risk (education-level)?
Concentrated stock means a large share of your net worth depends on one company (or a tight cluster). Liquidity events often create cash from selling some shares while leaving a still-large block unvested, pledged, restricted, or emotionally hard to sell. Education-level points — not a sell/hold call for your shares:
- Company risk is not market risk. A diversified index can fall and recover with the economy; a single issuer can restructure, dilute, or fail for firm-specific reasons.
- Correlation hides in “diversified” portfolios. Holding the stock plus sector funds, peer stocks, or employer-heavy target-date sleeves can stack the same bet.
- Taxes and restrictions are part of risk. Lockups, blackout windows, Rule 10b5-1 plans, and embedded gains affect when risk can be reduced — which is why sequencing cash/taxes before aggressive portfolio construction matters.
- Hedging and exchange funds are products with tradeoffs. Collars, prepaid variables, and similar tools can change risk and tax profiles; they are not free, and compensation on those products can create conflicts. Demand a dollars-and-conflicts map (how to spot hidden commissions and conflicts).
Tom’s consumer-advocate framing: if someone rushes you from “congratulations on the exit” to a packaged product before they can explain concentration, taxes due, and household risk in plain English, slow down.
How do cash, taxes, and risk collide in the first 90 days?
Illustration of process pressure — not your timeline, not advice.
Households often face overlapping clocks: estimated taxes, escrow releases, bonus tax withholding true-ups, and the urge to “do something” with a large cash balance. A durable education checklist:
- Know the cash floor. How many months of spending and known tax payments sit in cash or near-cash before you take market risk with the surplus?
- Separate “investable” from “spoken for.” Money already earmarked for tax, debt payoff, or a purchase is not dry powder for a new allocation story.
- Inventory every account. IRA, Roth, 401(k), taxable, trust, joint, and any leftover employer stock plan — balances and embedded gains/restrictions.
- Write the concentration number. One line: “X% of net worth still in Issuer Y (or Industry Z).” If the advisor cannot start from that number, they are decorating, not coordinating.
- Ask who trades and what you pay in dollars at the new asset level — including platforms and product layers (fiduciary duty in practice, how to read Form ADV Part 2A).
Martino Capital’s public posture for this stage: in-house portfolio management, a single transparent AUM fee, no product kickbacks, and commissions only under the Client-benefit / disclose / no-double-dip rule. Verify current disclosures on Part 2A and IAPD / CRD 329648.
When should you call a fiduciary advisor — and what are you hiring them for?
Call when the coordination problem exceeds what you want to manage alone: multiple wrappers, a tax year distorted by the event, residual concentration, trust or estate moving parts, or a prior advisor relationship that never mapped household risk. You are hiring judgment and process under a fiduciary standard — not a hot tip and not a black-box “model.”
Before you transfer assets, use the written checklist in questions to ask any advisor. Confirm whether they are a fiduciary always or only sometimes, who manages the book day to day, and whether a TAMP sits between you and the trades. Martino Capital’s answer is direct: we manage in-house under one AUM fee line you can map.
Phone-first: 303.771.4357 or the contact page. Email: tom@martinocapital.com. No online schedulers. Bring account statements, a rough tax picture from your CPA/attorney, and the concentration percentage you already calculated.
For Denver metro and Colorado HNW readers comparing what “local fiduciary” should mean in practice — registration, access, in-house management, and fee clarity — see what “local fiduciary” means for Denver and Colorado high-net-worth investors.
FAQ
Is this tax advice or a recommendation for my liquidity event?
No. This article is general education for Colorado / HNW readers. Tax treatment, IRA rules, and investment decisions depend on your facts. Work with your own tax, legal, and advisory professionals.
Should new liquidity always go into an IRA?
Often it cannot. Contribution limits, eligibility, and plan rules constrain how much (if anything) can enter IRAs in a year. Large sale proceeds commonly sit in taxable accounts first. Location planning is about coordinating wrappers you already have — not assuming unlimited IRA capacity.
What is “asset location” vs “asset allocation”?
Allocation is the household mix of risk (stocks, bonds, cash, alternatives, concentration). Location is which wrapper holds which pieces. Both matter after a liquidity event because new cash and old IRAs rarely start with the same mix.
Does selling concentrated stock always reduce risk?
Selling can reduce issuer-specific risk, but taxes, restrictions, and what you buy next all change the outcome. Sometimes households keep a conscious overweight. Education goal: measure the concentration and the tradeoffs — do not confuse “I diversified my brokerage account” with “my net worth is diversified.”
How do fees change after a liquidity event?
AUM fees scale with assets unless breakpoints apply. Product commissions and platform layers can also jump when someone “puts the money to work.” Ask for dollars at your new level and read ADV — see fee-only vs fee-based vs AUM and soft dollars, revenue sharing, and invisible costs.
How do I start a conversation with Martino Capital?
Call 303.771.4357 or use contact-us. We are a Colorado RIA (CRD 329648) focused on HNW households that want in-house management and a clear fee map — not a product shelf first.
Disclaimer: This article is general education, not personalized investment, tax, or legal advice, and not a substitute for reading a firm’s current Form ADV or consulting your own counsel. It does not create an attorney-client or adviser-client relationship. Advisory services are offered only where Martino Capital is appropriately registered or exempt. Past performance does not guarantee future results. For current disclosures, see our Form ADV on IAPD.
Page reviewed September 2026 for clarity. This is educational information, not personalized investment advice.