By Andrew Welsch
SpaceX's forthcoming IPO will likely result in a lucrative windfall for numerous current and former SpaceX employees who own shares in the aerospace and artificial intelligence company. It will also mean a bonanza for financial advisors lucky enough to win business from these suddenly wealthy employees. Taken together, the IPO is shining a light on the complicated tasks -- and costs -- associated with hiring a financial advisor after receiving sudden wealth.
Shares of SpaceX are expected to start trading on Friday and firms say they are meeting with employees who possess equity in the company and want to know how to manage their wealth now that the shares will soon be publicly traded.
Peter Mallouk, founder and CEO of Creative Planning, says his wealth management company has been in contact with prospective clients. "SpaceX employees are facing financial planning, legal, tax and investment decisions, all of which intersect when dealing with the unwinding of -- or working around -- concentrated stock positions," he says. He estimates nearly 100 SpaceX employees have reached out in the past few weeks.
That some SpaceX employees have waited until relatively recently to seek out advice isn't unusual, according to wealth management professionals. After all, their shares have been just so-called paper wealth. "This liquidity event might be the first time they are having a conversation with an advisor about this," says Daniele Griffith, director of tax operations at april, an AI-powered tax platform for wealth management firms.
As SpaceX shareholders have likely discovered, there are a variety of service models and fee structures within the wealth management industry. There are registered investment advisors, multifamily offices, brokerage firms, private banks, and robo-advisors. Some firms charge clients a fee based on assets under management; others charge a flat fee billed quarterly. Some financial advisors will charge a one-time fee for a financial plan, but they won't manage the investments on behalf of the client.
There is even some variation on the traditional 1% AUM fee. Some firms use a sliding scale, applying lower fee rates on higher assets under management. Robo-advisors typically charge among the lowest fees, about 0.25% on assets under management, for automated investment management. But some investors may need more bespoke services as well as someone who can act as both a sounding board and guide through unfamiliar financial terrain.
Collective bargaining? Some SpaceX employees are banding together in an effort to get fee discounts on wealth management services, according to a Bloomberg News report. The employees allegedly represent an estimated $20 billion in collective assets.
They are seeking to pay less than 0.5% on all assets under management, rather than the traditional 1% fee that many financial advisors charge, according to Bloomberg. The group has approached several firms, including Morgan Stanley, about discounts, according to Bloomberg. Morgan Stanley operates an investment bank unit and is an underwriter for SpaceX's IPO; it also operates a wealth management unit that includes thousands of financial advisors and online brokerage E*Trade. A representative for Morgan Stanley declined to comment.
Some wealth management firms, such as Mercer Advisors, say they are willing to provide discounts to prospective clients in certain circumstances. Jessica Caruso, executive managing partner of Mercer's West Division, says her company has experience working with clients in the tech industry and with clients benefiting from an IPO. It's worthwhile for Mercer, which has several offices in California, to win these relationships. "These are often young clients, people who will continue to build wealth," Caruso says. "This is the start of their wealth journey."
Need help? Advisors say that it's reasonable for investors to ask about fees, but suggest they also take a holistic perspective about what services they are getting and what the long-term benefits will be.
There are tricky tax and financial planning implications with managing IPOs. Having a strategy that takes into account the client's bigger picture is a must, Mercer's Caruso says. "What feels like the right investment decision might not be the right tax decision, not the right cash flow decision, or not the right estate planning decision," she says.
In some cases, SpaceX employees may be about to realize life-changing amounts of money. "That part often gets overlooked," says Frank Pare, president of PF Wealth Management in Oakland, Calif. "No one is stepping back and taking a look your whole life, what your current situation is, and where you want to be in the future. That too often is dealt with after the fact."
Justin Bakewell, head of client strategy at Pitcairn, a multifamily office, adds that investors also need to consider the implications for younger family members. "When you are talking about real wealth that brings substance and complications, you want to make sure the generation right behind you is also taken care of," he says.
Advisors say the sooner employees at companies likely to go public reach out, the better. Some strategies, like tax-loss harvesting (the selling of positions that are down to offset gains elsewhere in a portfolio), can yield better benefits over time.
"We have had a number of clients who have had major liquidity events around IPOs," says Matt Boersen, managing partner of Straight Path Wealth Management in Jenison, Mich. "They were mostly clients well before the event. That meant we had a handle on the tax consequences and planned for it to avoid getting more burned than needed on taxes."
Although the best time for SpaceX employees to reach out to a wealth management firm may have been 12 months ago, the second best time is now. For employees of other companies that are expected to go public soon, such as OpenAI and Anthropic, it might behoove them to start shopping around for an advisor sooner rather than later.
Write to Andrew Welsch at andrew.welsch@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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June 08, 2026 12:23 ET (16:23 GMT)
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