Gibson

If you’ve worked at Seagate Technologies in Northern Ireland, you’ll be well aware of what’s happened to the share price recently.

The AI boom has been good to STX. For many current and former employees, that means a number that looked comfortable a couple of years ago now looks significantly larger – and that’s not always as straightforward as it sounds.

We recently started working with a client who had retired from Seagate. He’d done everything right – worked hard, participated in the employee share scheme, built up pensions across a few different employers over the years. But when he sat down and looked at what he actually had, one thing stood out.

Around 35% of his total wealth was sitting in a single stock, listed on the US exchange.

That’s a lot of eggs in one basket. And he knew it.

The problem with concentration risk

There’s nothing wrong with holding shares in a company you’ve worked for and believe in. The issue is when one position – through no particular decision of your own, simply through price appreciation, starts to dominate your financial picture.

If STX pulled back sharply tomorrow, what would that mean for your retirement? Your income? Your plans to help your children and grandchildren?

What good advice looks like here

This wasn’t a simple case of “just sell the shares.” There were several layers to work through:

Capital gains tax. These shares are held on a US exchange, which brings its own reporting requirements. Any disposal needs to be structured carefully – ideally spread across tax years and between spouses – to make use of annual CGT exemptions and avoid an unnecessarily large tax bill landing all at once.

Building a diversified portfolio. The proceeds from any phased disposal needed a home. We worked with him to build a properly diversified investment portfolio, aligned to what he actually needs this money to do over the next 20-plus years of retirement.

Turning on a tax-efficient income. He had pensions from multiple previous employers sitting dormant. Before his state pension kicks in, there’s a window to draw down on these strategically – making use of the personal allowance each year, keeping tax to an absolute minimum.

A gifting strategy. He and his wife want to see their children and grandchildren benefit from this wealth now, not in 20 years’ time. We put a structured gifting plan in place – one that’s generous, but also sensible from an inheritance tax perspective.

The bigger picture

My client wasn’t greedy or reckless. He’d simply arrived at retirement with more than he expected, in a form that didn’t suit what he needed next.

That’s not unusual. Especially when a share price moves as fast as STX has.

If you’re a current or former Seagate employee and you’re looking at your holdings wondering what to do  – or if you’re not sure how exposed you actually are – it’s worth having a proper conversation.

The wealth is there. The question is making sure it’s working for you, not sitting at the mercy of a single stock’s next quarterly report.