GoKawiil"This is a unique transformational event," Van de Loo said. "We don't see events like this often. Most investors have decades to build wealth. When you get a moment like this, it's almost more like a large inheritance, or like winning a lottery ticket. It's not easy to wrap your head around the transactional components of that event."
Choreo's CEO, Jason Van de Loo, said the SpaceX IPO is a rare opportunity to build lasting relationships with a large group of clients whose wealth is about to skyrocket.
The deal, with a fee that starts at 0.5% and falls as the group's assets grow, represents a watershed moment in the wealth management industry, which traditionally charges clients based on their individual assets.
As CNBC reported earlier this week, more than 100 SpaceX employees with between $1 billion and $5 billion in combined assets have joined forces to negotiate better terms with wealth management firms. In anticipation of their massive windfall from Friday's IPO, the group has signed a deal with the registered investment advisor Choreo for wealth management services at a fee that's lower than industry standard.
Thousands of SpaceX employees who have suddenly become millionaires are redefining the wealth management business with their combined fortunes.
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The size of the Choreo group will likely grow over time, and the option is being made available to employees of other firms that are about to IPO. Yet the battle to manage the tens of billions of dollars in newly liquid wealth held by SpaceX employees is just getting started.
Private banks, wirehouses, trust companies and other registered investment advisors are all sending teams and hosting events in California, Texas and Florida is hopes of winning their business.
Jamie Battmer, chief investment officer of RIA firm Creative Planning, said the firm has dozens of SpaceX clients. The biggest question they face, he said, is whether to sell any of their stock.
SpaceX equity — typically granted in the form of restricted stock — represents up to 90% of many SpaceXers' wealth, Battmer said. With such heavy concentration in what will likely be a volatile stock, advisors typically counsel clients to diversify.
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