Advisers Move Quickly as SpaceX $75 Billion IPO Turns Employees Into Millionaires

SpaceX’s $75 billion initial public offering has triggered a surge of newly minted millionaires and is reshaping the wealth management industry as advisers compete to capture a concentrated pool of employee wealth emerging from the listing.

More than 100 SpaceX employees, whose combined holdings are estimated at between $1 billion and $5 billion, have formed a group to negotiate reduced-fee wealth management services ahead of and following the IPO, according to industry participants familiar with the arrangement.

The group has signed an agreement with registered investment adviser Choreo to manage assets at fees starting at 0.5%, with rates declining as assets under management grow, a structure advisers say departs from the traditional model of charging clients individually based on total assets.

“This is a unique transformational event,” said Jason Van de Loo, chief executive of Choreo. “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.”

The SpaceX IPO, valued at $75 billion, has created thousands of new high-net-worth employees and is expected to generate one of the largest recent pools of newly liquid wealth in the technology sector, intensifying competition among private banks, wirehouses, trust companies and registered investment advisers.

Firms are sending teams to California, Texas and Florida to court SpaceX employees, many of whom hold the majority of their wealth in company stock and are navigating sudden liquidity decisions for the first time.

Advisers say SpaceX equity, typically granted as restricted stock, accounts for as much as 90% of total wealth for many employees, raising concentration risk concerns.

Jamie Battmer, chief investment officer at Creative Planning, said many clients are reluctant to sell.

“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, advisers typically counsel clients to diversify.”

He added that employees, many of whom are engineers, often approach financial planning with technical rigor but limited experience managing large personal fortunes.

“Because it’s a group of engineers, these are individuals who do a better job of dotting every ‘i’ and crossing every ‘t,’” Battmer said. “But the vulnerabilities that come with just a seismic shift in your net worth are very dangerous and need to be navigated. Oftentimes highly skilled professionals can make the wrong decisions.”

Advisers say SpaceX employees also tend to collaborate closely in financial decision-making, reflecting the company’s engineering-driven culture.

Bill Dramis, a senior banker at JPMorgan Private Bank, said clients frequently apply a group problem-solving approach to wealth planning.

“Many of these people that we’re meeting are incredibly intelligent and like to whiteboard examples with their peers,” Dramis said. “That’s how they’ve grown up and built their knowledge base. So now it’s, ‘I have this problem set to tackle around wealth creation, tax impacts, charitable planning and giving.’ And they want to do that with their peers. They put it on the table and stress test it.”

Wealth advisers also say artificial intelligence tools such as ChatGPT and Anthropic’s Claude are increasingly influencing early-stage financial thinking among employees, who often bring AI-generated suggestions into advisory meetings.

“What’s been interesting to us so far is we’re finding creative ways to leverage AI as a part of those conversations,” Van de Loo said. “I think naturally for this employee cohort, the first instinct is to go ask Claude, ‘What should I do?’”

Advisers say the influx of newly liquid SpaceX employees is expected to intensify competition across the wealth management industry as firms seek to lock in long-term relationships with clients whose fortunes have rapidly expanded.

“We are here to advise people who are coming into these circumstances for the first time,” Dramis said. “A lot of the questions that we’re asked are, ‘Help me evaluate the scenarios, the trade-offs.’”

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