Wealth Protection Advisory
Topic

Concentration risk — measured at the household, not the account.

A position that looks measured inside a 401(k) often becomes outsized once the same exposure shows up in a spouse's IRA, a taxable brokerage, and a deferred comp account. The MRI makes that visible.

Where concentration usually hides

Long-tenured employees with company stock, founders post-liquidity, households with multiple advisors holding correlated 'best ideas,' and target-date funds layered on top of advisor-managed large-cap. None of these look concentrated until aggregated.

How the indicator is computed

The MRI aggregates positions by symbol across every uploaded account, computes household weights, and scores against two thresholds: largest single position and combined top-five. The score is clamped between 35 and 96 — preliminary, never a verdict.

What changes the conversation

Cost basis, restricted-stock and 10b5-1 plans, charitable goals, hedging tools, and tax bracket all bear on whether to trim, hedge, or hold. None of these are decided by the diagnostic — they are decided in a fiduciary conversation with the full picture.

Run the AI Portfolio MRI™

Receive a confidential, preliminary diagnostic across all five indicators. Advisor verification required before any recommendation.

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Related

Related portfolio reviews

Portfolio Overlap Analysis

Duplicated exposure that compounds concentration.

Portfolio Risk Analysis

Full household risk diagnostic.

Household Portfolio Analysis

Every account aggregated into one view.

FAQ

Frequently Asked Questions

What is investment concentration risk?

Concentration risk is when a single position, sector, or theme makes up enough of a household portfolio that its outcome disproportionately determines the household's outcome. It is the single most common reason a portfolio underperforms expectations during stress.

How much concentration is too much?

There is no universal threshold, but most fiduciary reviews flag positions above 10–15% of household assets — and a top-five share above 50% — for closer review. The right answer depends on basis, plan rules, and intended use.

Is concentration always a problem?

No. Concentrated positions sometimes reflect cost-basis, plan, or liquidity realities that justify holding. The point of the review is to make the trade-off explicit instead of incidental.