CLEARWATER WEALTH PARTNERS
Client Meeting Transcript
____________________________________________________________________________________
_
CLIENT: Chen Household (Sam & Alex Chen)
DATE: June 14, 2017
TIME: 2:00 PM
MEETING: 2017 Q2 Quarterly Review
LOCATION: Conference Room A, Clearwater Wealth Partners
____________________________________________________________________________________
_
TRANSCRIPT
[0:00] Sarah Chen: Good afternoon — glad you could both make it in. Markets have been
in a good place through the first half of the year. The S&P 500 is up roughly 9%
year-to-date, driven by strong corporate earnings and continued low volatility. Your
portfolio is at approximately $538,000 — up about $52,000 since we started the year
at $486,000. Contributions are doing their part too. Allocation is at 70/28/2 — right
on target per IPS-2016.
[0:03] Sam Chen: That's good to hear. We've been watching the news and wondering
whether the political uncertainty in Washington would spill into the markets more
than it has.
[0:04] Sarah Chen: It's a fair concern, and one a lot of clients are asking about.
The markets have been surprisingly resilient — earnings have been the real driver,
not policy. That said, I don't want complacency to creep in. We stay fully invested
and stay diversified. That's the posture regardless of what's happening in
Washington.
[0:07] Alex Chen: Speaking of staying invested — the IRA rollover from my old
employer. Where does that stand?
[0:08] Sarah Chen: Fully processed and invested. The $42,000 came over as a direct
rollover into IRA1 — no taxable event, no withholding. I invested it consistent with
your IPS allocation: roughly 70% in UECIX for the equity sleeve, 28% in STBIX for the
bond sleeve, the remainder in the money market. It's been there since late Q1 and has
benefited from the market run-up.
[0:11] Alex Chen: Good. That account was just sitting in a 2035 target-date fund
at my old employer. I never felt like it was really working.
[0:12] Sarah Chen: Target-date funds are fine for people without active management,
but now that it's here, it's coordinated with your full picture — tax location,
allocation, and rebalancing are all integrated. Much more efficient.
[0:14] Sam Chen: What about the NLTK RSUs? Alex got a new grant statement last
month and we're not really sure how to read it.

[0:16] Sarah Chen: I'd like to go through that today. Your current RSU grant is a
standard four-year vest schedule — 25% after year one, then quarterly thereafter.
Based on your grant date, your first meaningful tranche is coming up in Q4 of this
year — roughly 750 shares. At current NLTK prices around $13 per share, that's about
$9,750 of W-2 income at vest. Not enormous, but it's the beginning of the program.
[0:19] Alex Chen: So that income just shows up on my W-2?
[0:20] Sarah Chen: Exactly. The shares vest, the company withholds at the
supplemental rate — typically 22% federal — and the net shares or cash come to you.
If the company sells shares to cover the tax, you'll see that on your stock account
statement. I want to make sure you're not surprised when October or November rolls
around and you see a transaction.
[0:22] Sam Chen: And the shares we hold after taxes — what do we do with those?
[0:23] Sarah Chen: That's the conversation we'll have more formally when the Q4 vest
happens. In general: we don't want too much concentration in any one company stock.
NLTK is a good company and Alex knows it well, but from a portfolio standpoint,
single-stock risk is uncompensated risk. My default recommendation is to diversify
most vested shares promptly. We'll set a specific protocol before the Q4 vest.
[0:26] Alex Chen: That makes sense. I've heard people say you should hold your
company stock because you know it best, but I also get that that's not necessarily
smart.
[0:27] Sarah Chen: You understand the business, but you don't have information the
market doesn't. And you already have your human capital — your job, your salary —
tied up in NLTK. Adding your investment portfolio on top of that doubles the
exposure. We'll hold a small amount for psychological connection, but diversify the
majority. Let's plan to talk specifically about that in September.
[0:29] Sarah Chen: Action items: I'll send you a summary of the RSU vest protocol
options before the Q4 meeting, and I want both of you to confirm your beneficiary
designations on the IRA are current — make sure IRA1 has Sam as primary. Let's
touch base again in September.
[0:30] Meeting adjourned
____________________________________________________________________________________
_
ACTION ITEMS
1. Send RSU vest protocol summary to Chens before Q4 meeting — by September 1
2. Confirm IRA1 beneficiary designations — Sam as primary, Alex's estate as
contingent — client to verify
3. Schedule Q4 meeting for October/November ahead of NLTK Q4 vest
____________________________________________________________________________________
_
CONFIDENTIAL — For client use only. Not for distribution.
