Many investors have concentrated holdings that can arise in a number of ways. Shares in a family business commonly represent an overwhelming portion of the owner's wealth and his or her descendants. Even after a business is sold, family members tend to retain concentrated positions of the publicly traded acquiring company in their portfolios. The wealth of many corporate executives is concentrated in the shares of their employers either directly or through stock options.

As a result, these investors face above-average risk from their portfolios concentrated in a single stock. Most investors will readily agree that a diversified portfolio carries less risk of loss than a concentrated holding as well as enhances a portfolio's return. At Fiduciary, we have extensive experience developing sophisticated diversification strategies for clients that mitigate risk in a tax-efficient manner.