Millennial Money Advice For New Tech Millionaires: Just Say No To Robos

By: Sarah Hansen | Forbes Staff

When Xi Qiao left home in Los Angeles to attend the University of California, Berkeley, on a full scholarship, her mother gave her just $80 in spending money to get her through her undergraduate years. "She told me, 'if you need money, make it on your own,'" Qiao recalls.

So Qiao did exactly that, quickly finding a job selling advertising space on university buses to local small businesses, restaurants, and recruiters targeting Berkeley students. And she was pretty good at it, too: By the time she graduated in just three years, Qiao had two full years of future ad space already pre-sold.

"That's where I really developed a lot of my skill set for this career," she says. "A lot of it is sales and marketing in the beginning. You have to find your own clients so you can manage money."

Now Qiao, 34, is an SVP of wealth management for the San Francisco office of UBS after getting her start at Morgan Stanley and a stint in the international office of Merrill Lynch. She advises a very unique book of young clients, most of whom are early-stage employees of tech companies. "This generation of Millennial clients is looking for something very different," she says.

The clients are founders, entrepreneurs, and venture capitalists, most of whom have acquired significant wealth, often in the form of employee stock after tech IPOs, in a very short amount of time. They are split relatively evenly between the United States and China and Hong Kong, where Qiao travels about three times a year.

Unlike many other advisors, Qiao often doesn't discuss investing opportunities until two or three years into the advisor relationship. "A lot of times we're not even investing at all," she says. "What we're doing is managing concentrated positions. I try to help them sell those positions in the most tax-efficient manner, and then eventually set up the trust that's necessary to hold some of these positions."

Qiao helps her clients understand how to manage and protect their newfound wealth. When one early tech employee wanted to sell a large number of concentrated stock to buy real estate, for example, Qiao helped him build a plan that allowed him to save on taxes and avoid cashing out completely from his most valuable position. Instead of selling most of his stock, Qiao advised him to sell a small portion of his shares, reinvest them in a diversified portfolio, and use that portfolio to finance a mortgage on the property.

Qiao also has some very specific advice for her specific client group: hire a person, not a robo-advisor, to help manage major new wealth: "Get the advice you need because it gets complicated, especially with selling stock options," she says. And finally, TurboTax is not going to cut it anymore: "You need to get a real CPA, too."

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