Managing Unrealized Gains When Changing Advisors
By Annette Di Bello, CPA / PFS, CFP® : Last Updated: October 10, 2026
Changing Financial Advisors With Large Unrealized Gains: How to Transition an Appreciated Portfolio Tax-Efficiently
Changing financial advisors does not have to mean selling your entire portfolio. For high-net-worth investors, one of the biggest concerns when moving to a new advisor is the tax impact of transitioning a taxable account with highly appreciated securities, concentrated positions, or long-held investments.
At Di Bello Financial, we evaluate existing holdings security by security, considering both the investment merits of each position and the tax consequences of making changes. The objective is not simply to replace an old portfolio with a new one, but to create a thoughtful path toward the desired portfolio while managing taxes, diversification, risk, and long-term goals.
An Account Transfer Is Not the Same as a Portfolio Liquidation
Investment accounts can often be transferred in kind, meaning eligible stocks, ETFs, and bonds move to the new custodian without being sold. The transfer itself generally does not create capital gains. Taxes typically arise only when appreciated investments are later sold.
This allows the new advisor to review the portfolio before making unnecessary changes.
Start With the Existing Portfolio
Before making changes, we review cost basis, unrealized gains and losses, concentration, investment quality, account type, tax circumstances, liquidity needs, and the role each holding should play going forward.
Some securities may no longer fit the strategy, while others may still be attractive investments worth retaining. A holding should not be sold simply because it was purchased by a prior advisor.
Taxes Matter, but Investment Risk Comes First
Tax efficiency is important, but avoiding taxes should not become the only objective. A highly appreciated stock may also represent excessive concentration risk, and a deteriorating investment may no longer deserve a place in the portfolio simply because selling it would create a gain.
The better question is whether a decision improves the investor’s overall after-tax outcome while keeping the portfolio aligned with long-term goals.
Transitions Can Be Managed Over Time
There is often no reason to transition an appreciated portfolio all at once. Sales can sometimes be staged across multiple tax years and coordinated with capital losses, retirement, Roth conversions, charitable deductions, business income fluctuations, or other major financial events.
This is where investment management and tax strategy need to work together.
Tax-Loss Harvesting and Charitable Giving Can Help
Available losses may sometimes be used to offset realized gains as part of the transition process. Investors with charitable goals may also consider donating appreciated securities directly rather than selling them first, subject to their individual tax circumstances.
Both strategies can be useful when incorporated into a broader portfolio and tax plan.
Asset Location Matters Too
A transition is not only about what to sell or keep. It is also about where investments are held. Coordinating taxable accounts, traditional IRAs, Roth IRAs, and other accounts can improve overall tax efficiency and help manage the household as one portfolio rather than as a collection of separate accounts.
Concentrated Stock Requires Special Attention
Executives, business owners, and long-term investors may hold highly appreciated stock accumulated through RSUs, stock options, an IPO, a business transaction, or many years of appreciation.
In these cases, diversification may need to occur gradually. The transition may involve staged sales, tax-loss harvesting, charitable gifting, and ongoing monitoring rather than an immediate liquidation.
How Di Bello Financial Approaches Portfolio Transitions
When a new client transfers an existing portfolio, we review the holdings individually rather than automatically selling everything. We evaluate what may reasonably be retained, what should be reduced or eliminated, and how changes can be implemented over time with consideration for both investment fundamentals and tax consequences.
Because we manage portfolios using individual stocks, bonds, and low-cost ETFs, we have flexibility to build around appropriate existing investments rather than forcing every client into the same model portfolio.
A Thoughtful Transition Can Matter as Much as the Final Portfolio
For investors with significant embedded gains, the transition process itself can materially affect after-tax wealth. The goal is not simply to arrive at the right long-term portfolio, but to get there through a disciplined process that balances investment quality, diversification, risk, taxes, and the investor’s broader financial situation.
Annette Di Bello, CPA/PFS, CFP®
Founder & CEO, Di Bello Financial
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Important Disclosure: This material is provided for informational and educational purposes only and should not be considered personalized investment, tax, legal, or accounting advice. Tax laws and investment circumstances vary by individual and may change over time. Investment decisions should be based on each investor’s specific financial circumstances, objectives, risk tolerance, tax situation, and other relevant factors. Past performance does not guarantee future results. Investing involves risk, including the possible loss of principal.
About Annette Di Bello, CPA/PFS, CFP®
Annette Di Bello is the founder and CEO of Di Bello Financial, a fee-only Registered Investment Advisor serving high-net-worth individuals, families, business owners, and executives. She has more than 35 years of progressive experience in accounting, tax, investing, and financial planning, including more than 25 years of tax experience preparing thousands of individual, business, entity, and other complex tax returns and more than 20 years advising high-net-worth clients.
She has been a licensed CPA since 2005, a CERTIFIED FINANCIAL PLANNER™ professional since 2008, and holds the Personal Financial Specialist credential from the AICPA. At Di Bello Financial, she leads an investment-first approach using customized portfolios of individual stocks, bonds, and low-cost ETFs, with year-round attention to tax efficiency, retirement planning, and long-term wealth strategy.
At a Glance Tax-Efficient Portfolio Transitions
Changing financial advisors does not have to mean selling an entire portfolio. Investors with large unrealized gains may be able to transfer eligible holdings in kind, retain investments that still fit the strategy, and transition other positions over time.
A thoughtful portfolio transition considers investment quality, concentration risk, cost basis, tax consequences, available losses, charitable giving, and asset location together. The goal is not simply to minimize taxes, but to move toward a better long-term portfolio without creating unnecessary tax costs.
At Di Bello Financial, we review transferred portfolios security by security and coordinate investment decisions with tax strategy to help manage the transition efficiently.