Family wealth often comes from the substantial appreciation, over time, of a single holding. You may have created this wealth or perhaps inherited it. The end result, however, may be that a significant portion of your wealth is tied up in a single asset, exposing you to greater risk and opportunity costs than you may realize.
There are pros and cons to each way you can diversify and mitigate the risks that accompany a large holding. Before deciding on any strategy, it is important to determine what you are trying to accomplish with your assets and to understand how the different investment strategies impact your portfolio and your ability to reach your investment goals.
In How Much is Your Concentrated Position Really Benefiting You?, Klingenstein Fields Advisors (KF Advisors) identifies different types of concentrated holdings and outlines the pros and cons of different diversification alternatives from a liquidity and tax perspective.