One of the ways credit card companies, airlines and other businesses build loyalty and keep us coming back is through rewards points that can be applied to future purchases.

The terms and conditions for these loyalty points tend to be multiple pages, highly confusing and often disguise nasty surprises in language that even lawyers have difficulty making sense of. Several have been criticized as being unfair and little more than a bait-and-switch.

But what one company did to the widow of a loyal customer highlights a lack of care, compassion and common sense that others can learn from. We're not naming the company, as the situation could very well have been an outlier, but it's a useful lesson for management in what not to do.

An escape from the world of chronic kidney disease

Reader "Anna" described the love "Dallas" had for this particular company's products, starting when he was a child. "He loved (them) even more after we got married. Born with failing kidneys, he found it a helpful activity when he was undergoing dialysis treatments."

Anna said he spent his many loyalty points on products that made him so happy, and toward the final stages of his illness, they worked together on a project that would be the last one they finished together, right before he died.

"Today, I look at it with so much love. We knew each other since college and were married only three years. It was an honor being his wife."

What happened to his loyalty points?

Anna knew his loyalty points account number and tried to use the points that remained to buy a gift for her father-in-law, but the company refused the transaction, saying, "Points expire after 18 months, and we sent (the account owner) notice of the impending loss."

They did, indeed, send that notice to his email, after he died. "Due to his illness, I handled all of our financial affairs and never went into his email account," she explained.

She sent a polite email to customer service, explaining that her husband had died and that, given he was a lifelong loyalty club member, would the company please reconsider and allow her to use his remaining points. On its website, the company acknowledges that it will waive the expiration period with good cause.

Anyone with compassion would consider Anna's situation "good cause."

A cold and heartless response

Company representative "Pamela" emailed Anna: "Very sorry to hear of the loss of your husband, but we cannot take any actions on the account except on behalf of the account owner."

A friend of Anna referred her to me, and when I read that, I wondered what insensitive, heartless idiot would tell a widow that the company could deal only with her deceased husband? These are the types of blatant unfairness that motivate me.

I regularly reach out to the media contact personnel at large companies and ask them to please look into an issue. Now, suppose that you were the person I contacted about Anna's situation. Wouldn't you fact-check first, and then, knowing that expired points can be restored, wouldn't you do that for Anna? Of course you would.

But not this company's media rep. "Wendall" referred the matter to "Charles," in his department, who called me. We both looked at Dallas' obituary online, but instead of saying, "Sure, we need to make this right," Charles did the bureaucratic thing and sent the matter back to customer service.

Days went by, proving that Pamela, Wendall and Charles had to have been standing behind the door the day common sense was handed out.

Finally, Anna received an email — not a phone call, because clearly, these three people have a problem with kind human interaction — from "Bill" in customer service stating that she would receive a gift card for the value of her husband's points. A week later, it arrived. So at least they did that part right.

A business professor looks at the situation

I ran this by Lyle Sussman, professor emeritus in the College of Business at the University of Louisville and a friend of this column for many years. "Beav, this reminded me of my favorite example of customer service from hell. A few years ago, a bank manager required a thumbprint from a customer without arms."

"Requiring authorization from a dead person is like requesting a thumbprint from someone who has no hands. It's also the kind of Kafkaesque SOP (standard operating procedure) that sets the stage for social media backlash and a column by Dennis Beaver.

"This issue is a classic example of rigid SOP constraining common sense in customer service. The fact that a customer service manager finally did the right thing is a testament to someone in the chain of command saying something like, 'Enough's enough. Let's stop being stupid!'"

With some loyalty programs, there are ways to prolong the life of your reward points. I'll explain how to do this in a future story and show why companies just can't wait for customers to forfeit their rewards.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

For many business owners, a liquidity event is the culmination of decades of work. But selling a business creates a challenge that is often underestimated: Replacing the role the business once played in the owner's financial life.

A privately held business is more than an appreciating asset. It often functions simultaneously as an income engine, inflation hedge, growth vehicle and source of control. After a sale, those functions must be replaced by an investment portfolio.

That transition can be surprisingly difficult, even for financially sophisticated investors.

Post-liquidity challenges for business owners

The cash flow vacuum. Business owners are accustomed to visible, recurring cash flow. After a sale, many become uncomfortable relying on portfolio withdrawals during periods of market volatility.

At the same time, expenses previously absorbed by the business — travel, vehicles, professional services or family payroll — may now require direct personal funding.

Capital deployment risk. A liquidity event may suddenly convert years of concentrated operating wealth into investable capital.

Without a clear framework, investors may overcomplicate portfolios, chase private deals or recreate concentration risk through new operating ventures.

Behavioral risk. Many business owners tolerate illiquidity inside their businesses but struggle emotionally with the daily volatility of public markets. A portfolio that appears efficient on paper may fail if the investor cannot remain committed during market drawdowns.

Why traditional portfolio models may fall short

Traditional portfolio construction often focuses on diversification by asset class rather than by purpose. For former business owners, this can create friction.

Common issues include:

• Heavy reliance on principal withdrawals during market declines
• Portfolios organized around investment labels rather than spending needs
• Excessive complexity that weakens investor conviction
• Difficulty balancing near-term income needs with long-term legacy objectives

For many business owners, the key question after a sale is not simply, "How do I maximize returns?" but rather, "How do I replace the function my business once served?"

Dividend growth as a portfolio anchor

Dividend growth strategies can help address this challenge because they combine three characteristics many business owners value:

• Current portfolio cash flow
• Long-term participation in equity market growth
• A more tangible connection between the portfolio and the investor's lifestyle needs

Rather than viewing income as a byproduct of investing, dividend-oriented strategies prioritize the role recurring cash flow plays in supporting investor behavior and long-term discipline.

Importantly, dividend growth strategies are not substitutes for diversification, nor are dividends guaranteed. However, for some post-liquidity investors, they can serve as a stabilizing "core" around which broader portfolio objectives are built.

A three-pool framework for post-liquidity wealth

One practical way advisers structure post-sale portfolios is through a goal-based framework that segments capital according to purpose.

1. Lifestyle capital. This pool is designed to support spending needs and replace the income previously generated by the business.

Dividend-focused strategies may help provide recurring portfolio cash flow while reducing reliance on selling assets during market declines. For some investors, this can improve confidence and reinforce long-term discipline.

Potential complementary allocations may include:

• Cash reserves for liquidity
• Treasury Inflation-Protected Securities (TIPS) for inflation management
• Private credit for additional income generation

2. Generational capital. This pool focuses on preserving and compounding wealth over long time horizons.

Quality-oriented dividend growth companies may provide exposure to businesses with durable earnings, strong balance sheets and the potential for long-term growth in both income and capital appreciation.

Satellite allocations may include:

• Private equity
• Opportunistic credit
• Targeted thematic equity exposure

3. Aspirational capital. This pool supports philanthropic, impact or family mission-oriented objectives.

Dividend-paying equities can provide a liquid base that may help support long-term charitable or opportunistic investments without impairing broader portfolio flexibility.

Potential satellite exposures may include:

• Impact investments
• Real assets
• Direct private investments

Solving for outcomes instead of asset labels

The appeal of dividend growth strategies for post-liquidity investors is not simply higher current income. Rather, the objective is to align portfolio structure with how business owners experience wealth.

For example, an investor seeking to generate portfolio cash flow after a sale may prefer a structure that produces a meaningful portion of spending needs internally through dividends and interest, rather than relying exclusively on asset liquidation

Similarly, trusts or family entities with competing income and growth objectives may use dividend-oriented equity exposure to help bridge the gap between current distributions and long-term capital appreciation.

The broader principle is that portfolios should be organized around outcomes:

• Lifestyle support
• Long-term compounding
• Legacy and philanthropic goals

This can create a clearer connection between the portfolio and the investor's financial objectives.

Practical considerations for advisers

Dividend growth strategies can play a role across multiple account types:

• Taxable accounts. Potentially tax-efficient income with long-term growth participation
• Qualified accounts. Internal cash flow generation that may help offset required minimum distributions
• Trust structures. Harmonization between current income beneficiaries and long-term remainder beneficiaries

However, advisers should also communicate the limitations clearly.

Dividend-focused strategies may underperform broader markets during speculative or momentum-driven rallies. They also remain subject to equity market risk, sector concentration risk and the possibility of dividend reductions.

No single strategy eliminates the need for diversification.

Five principles for the post-liquidity transition

Advisers helping business owners navigate liquidity events should focus on several core principles:

• Segment capital by purpose. Define what each pool of capital is intended to accomplish
• Establish the income engine early. Replacing lost business cash flow can improve investor confidence and discipline
• Integrate income and growth. Avoid treating these objectives as mutually exclusive
• Design for investor behavior. Even well-constructed portfolios fail if investors cannot remain committed during volatility
• Maintain clarity. Simplicity often improves long-term conviction

The bottom line

A liquidity event is not simply a diversification exercise. It is a transition from operating wealth to invested wealth.

For many business owners, the challenge is not maximizing theoretical returns but creating a portfolio capable of replacing the multiple functions the business once served — generating cash flow, supporting growth, protecting purchasing power and reinforcing confidence.

Within a broader diversified framework, dividend growth strategies may help address those objectives by combining current income potential with long-term equity participation.

Ultimately, successful post-liquidity planning depends less on complexity and more on aligning portfolio structure with how investors actually experience and use their wealth.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Space exploration came to the world more than a decade after World War II ended. To begin with, two countries dominated the field: America under the auspices of NASA (National Aeronautics and Space Administration) and the Soviet Union's slew of space design bureaus. It got dubbed the Space Race.

Fast forward to now, and there's another space race, this time it's happening via private and public enterprise. That means you could profit from companies involved in the space sector by purchasing relevant stocks. But which ones?

Top of the headlines is Elon Musk's SpaceX (the Space Exploration Technologies Corp, ticker symbol: SPCX), which, as well as rocketry, includes data centers, artificial intelligence and Starlink, the 10-satellite communications network. The company's initial public offering, in June, raised an extraordinary $85.7 billion, $10 billion more than expected. That made it the largest IPO in history. As if that wasn't enough excitement, SpaceX's shares soared to approximately $177 in less than a week, up from $135 at the IPO. By then, the market capitalization hit $2.4 trillion.

As with many things involving Elon Musk, there are those who love it and those who think the opposite. Michael Monaghan, portfolio manager at Founder ETFs in Dallas is among the former: "We are bullish on SpaceX. We think SpaceX will be the dominant space company with the highest efficiency and lowest price."

Monaghan also views a defense angle that SpaceX could benefit from. "The U.S. wants a moon base, and there is only one company that can do this: SpaceX," he says. "It's being planned partly for geopolitical reasons, with a new report saying, 'the Space Force needs to prepare for an in-person moon conflict with China.'"

On the other hand, there are skeptics, notably Morningstar's industrial equity analyst Nick Owens, who believes the value of SpaceX is $63 per share, which is less than half the IPO price. He's waiting for evidence that SpaceX's goal of putting data centers in space, along with artificial intelligence, is likely to materialize.

"The validation evidence would be that the rockets are reliable," Owens says. "And to find out the commercial viability in space, we will want to know the relative costs to those data centers on Earth."

Of course, there is more to the new space race than SpaceX. For instance, there's Rocket Lab (RKLB), a launch services provider. "I am very positive they are doing really good work in small launches that few others do," says Keith Snyder, a senior analyst at CFRA Research, based near Denver.

Snyder recently published a comment saying that Rocket Lab "is recognized as a preferred supplier across the space industry, with components and platforms being selected for flagship missions such as Artemis, Mars rovers and the International Space Station resupply, as well as for national security programs."

There's also good news on bookings, according to Snyder. He wrote, "Strong customer confidence and demand for [Rocket Lab's] Neutron launch vehicle was evidenced by significant pre-launch bookings." The company also has a record backlog of launches with 70 launches scheduled. Rocket Lab stock recently traded at $107, but Snyder has a one-year target of $140.

Aerospace company Boeing (BA) might not stand out as a major space competitor, but it does have a role in making bespoke rockets, rather than mass-produced ones, writes CFRA analyst Matt Miller. He also notes that Boeing has huge revenue, mostly from its commercial airplane sales: $89.5 billion last year and a forecast of $98 billion this year.

There's also limited competition for its products. The combination of solid revenue and minimal competition (notably from Airbus) should provide some economic ballast for the stock while still giving it a foothold in the Space sector. Miller has a 12-month target of $278 for Boeing stock, compared to a recent price of $223.

For those who want to avoid buying individual stocks, there are exchange-traded funds that track baskets of space-related stocks, such as the VanEck Space ETF (WARP), the Procure Space ETF (UFO) and the ARK Space & Defense Innovation ETF (ARKX). Overall, these funds will likely be less volatile than any individual space-related shares.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that's right on the money.

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For years, off-site meetings and corporate events have been viewed as reliable investments in culture, opportunities to strengthen teams, reinforce company values and give employees a chance to recharge away from the daily grind.

But the economics surrounding those gatherings are shifting. Rising costs and tighter budgets are forcing companies to rethink how they deliver memorable experiences without the lavish spending that once defined corporate retreats.

That creates a mandate for meeting planners and executives alike: Do more with less, without making the experience feel diminished or cheap. Pulling that off requires far more than trimming menus or shortening agendas. It demands smarter experiential strategies that preserve energy, engagement and connection even as financial pressures intensify.

And those pressures are real. American Express' latest Global Meetings & Events Forecast describes the environment as the industry's "new normal." While planners remain optimistic overall, the survey found that rising costs are now a major concern for nearly four in 10 respondents, while many organizations are simultaneously navigating budget reductions amid ongoing economic uncertainty.

A shift in mindset

The result is a notable shift in mindset. Companies are moving beyond the old playbook of simply downgrading venues or pushing events online.

Instead, they're searching for creative ways to elevate experiences through thoughtful programming, stronger storytelling and more intentional engagement, proving that a successful corporate event is no longer defined by extravagance, but by impact.

That shift is forcing companies to rethink what employees actually value in corporate gatherings. Flashy destinations and oversized production budgets may grab attention, but they're not necessarily what creates connection or lasting engagement.

Increasingly, attendees are looking for experiences that feel authentic, interactive and worth the time away from their already demanding schedules.

In many cases, constraint itself is becoming a catalyst for innovation. Companies are replacing expensive spectacles with more personalized and participatory experiences:

• Smaller breakout sessions that encourage genuine collaboration
• Local cultural tie-ins that create a sense of place
• Wellness-focused activities that address burnout
• Interactive storytelling formats that make employees feel involved rather than simply spoken to

The smartest planners are discovering that creativity, intentionality and emotional resonance often deliver a far stronger return than excess ever did.

The overall mission is the same

Whatever the "new normal" ultimately looks like, a smaller in-person gathering, a hybrid format or a fully virtual event, the underlying mission hasn't changed. The companies that get meetings right are still trying to accomplish the same things they always have:

• Strengthen relationships
• Reinforce culture
• Give people a reason to feel connected to the organization and to one another

At their core, the most effective meetings and events communicate five enduring messages: Trust, appreciation, care, shared purpose and recognition.

Strip away the staging, the swag bags, the cocktail receptions and the PowerPoint decks, and those are the impressions attendees carry home. People may forget the agenda, but they remember whether they felt valued, included and part of something meaningful.

How to build connections

One of the smartest ways to start building that connection is with a pre-meeting survey. Post-event surveys are standard practice, but they're essentially autopsies, useful for understanding what already happened.

A pre-event survey, by contrast, gives organizers a read on expectations before anyone walks into the room or logs on to the platform. Even when attendee priorities don't perfectly align with the company's objectives, that feedback provides critical intelligence about what participants hope to gain from the experience, insight that can shape everything from programming and speakers to networking opportunities and tone.

The insights gathered from those pre-meeting surveys can also help organizers build something every successful event needs: A compelling storyline.

That narrative thread is what transforms a collection of sessions, speakers and activities into an experience people actually connect with. It's one of the most important ingredients in a successful meeting strategy because, once an event loses its narrative focus, it's extraordinarily difficult to regain momentum.

A strong storyline, on the other hand, creates anticipation, gives attendees a sense of direction and drives higher engagement throughout the event.

For that storyline to resonate, it also has to feel authentic and empathetic. That often requires executives to set aside a measure of ego and focus less on what they want to say and more on what employees need to hear.

The strongest leaders lean on communications, HR and employee experience teams, and sometimes professional storytellers, to help shape a narrative grounded in the audience's mindset, concerns and expectations.

The most effective meetings are not built around executive messaging alone; they're built around understanding where attendees are emotionally when they walk into the room.

What happens during the meeting itself is important, but the real test comes afterward. The organizations that create lasting impact are the ones that continue the conversation long after attendees leave the room or log off the platform.

Ongoing communication, community-building and sustained engagement are what turn a successful event into meaningful long-term change. People may leave energized in the moment, but without thoughtful follow-through, that momentum quickly fades.

The irony is hard to miss: At a moment when employee engagement is at historic lows and retention has become a high-stakes challenge, companies are being forced to do less with the very gatherings designed to build connections.

But the constraint may be clarifying something that should have been obvious all along — employees never needed the lavish destination or the open bar to feel valued. They needed to feel seen, heard and part of something larger than their inbox.

The companies navigating this shift successfully aren't mourning the loss of big budgets. They're recognizing that impact was never about the spend. It was about whether people walked away feeling that the organization understood and trusted them and that it was worth their commitment in return.

That's a message you can deliver in a ballroom or on a Zoom call, at a resort or in a repurposed warehouse. The medium has never mattered as much as the intention behind it.

This isn't a temporary adjustment while companies wait for budgets to recover. This is a permanent recalibration of what corporate gatherings are supposed to accomplish.

The era of events as spectacle is over. What's replacing it is something more demanding and, ultimately, more valuable: Events as a genuine connection. Done right, that doesn't just save money. It builds the kind of culture that keeps your best people around long after the meeting ends.

The question isn't whether you can afford a great event anymore. It's whether you can afford not to create one.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To help you understand what's going on in business and the economy and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

Amid a series of punishing heat waves, demand for air-conditioning will increase to better meet the needs of people, industry and more. But such growth comes with huge challenges.

Globally, there are 2 billion air conditioners, according to the International Energy Agency (IEA). A significant number of them are concentrated in the U.S., where more than 90% of households have AC units. Expect that number to nearly triple by 2050, with growth driven primarily by emerging economies where incomes are rising, including China and India.

Rising global temperatures are a big concern. Extreme heat has become a very deadly health hazard, responsible for an estimated 489,000 deaths annually. In the U.S., it causes more weather-related deaths than floods, hurricanes and tornadoes combined.

HVAC companies smell a big opportunity. These range from established Japanese and U.S. firms like Daikin, Trane Technologies, Carrier, Mitsubishi and Johnson Controls to rising Chinese manufacturers like Midea Group, Gree, Hisense and Haier. The latter have started to make inroads in AC-averse Europe during the continent’s recent heat wave. For example, sales of Midea’s PortaSplit, a popular portable unit, are more than double (200,000) last year’s total in Europe.

Look for advances that make AC better, cheaper and more energy-efficient. Cooling equipment consumes an estimated 5,000 terawatt-hours per year globally, roughly equal to America’s entire annual electricity consumption. Air conditioners also represent the fastest-growing single source of electricity usage in buildings. Among those in the works:

• Start-up Transaera makes industrial HVAC units that cost 20% more than traditional systems but are 40% more energy-efficient. The company has a deal with Amazon to install units in its e-commerce warehouses.
• Bill Gates-backed Blue Frontier has developed a special liquid desiccant process, combined with heat pump technology, that can cool indoor air more efficiently. Recent National Renewable Energy Laboratory (now known as the National Laboratory of the Rockies, NLR) trials found that Blue Frontier’s AC has the potential to significantly lower power demand and cut cooling bills in half.
• Carrier is working with several utilities on in-home trials of its hybrid HVAC units, which have built-in battery systems that can store power generated by solar panels during peak hours, then use it in the evenings to free up more grid capacity.

The future of air-conditioning is more than home cooling, which still accounts for the largest share of the HVAC market. Still, companies like Carrier have seen sales sag and started turning their focus to more lucrative ventures, such as data centers. The huge growth in these new applications could prove a strain on power infrastructure around the world, underscoring the importance of the innovations now being pursued.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Tax planning for executives can look very different from standard financial advice. The reason? Your compensation package likely includes a complex mix of salary, bonuses, company stock and deferred compensation — all of which involve tax considerations.

Last year's One Big Beautiful Bill Act (OBBBA) introduced new "tax traps" specifically targeting the executive suite.

In 2026, a $75,000 bonus could lower your net take-home pay if it triggers the wrong phase-out. At this level, what matters isn't what you earn, but what you keep.

The good news from the OBBBA

The OBBBA resolved much of the uncertainty surrounding the expiration of the Tax Cuts and Jobs Act. For high-income earners, there are a few permanent victories:

• Top-rate stability. The 37% top tax rate is now permanent. Without this legislation, the rate was set to revert to 39.6% in 2026.
• QBI deduction. The 20% qualified business income deduction for pass-through entities (S corps, LLCs, partnerships) no longer has an expiration date.
• Estate exemption. The exemption is $15 million per person ($30 million for married couples) in 2026 and is locked in through 2033.
• Bonus depreciation. 100% first-year bonus depreciation has been restored permanently, allowing for the immediate deduction of business equipment costs.

The tax traps to watch out for

While the wins are significant, several new provisions act as a "stealth tax" on executive income.

1. The SALT phase-out.

The OBBBA raised the state and local tax (SALT) cap to $40,400 for joint filers, but it comes with a catch: It only applies to those with a modified adjusted gross income (MAGI) under $505,000.

Above that, the benefit phases out entirely, reverting to the old $10,000 cap by the time you reach $600,000.

Pro tip: Participation in deferred compensation can reduce current-year taxable income.

2. The 2026 AMT reset.

The alternative minimum tax (AMT) is set to kick in harder this year. For married filers, the exemption resets to $140,000 (down from 2025 levels), and the phase-out rate doubles from 25% to 50%.

If you plan to exercise incentive stock options (ISOs) in 2026, you should run an AMT projection first to avoid an unpleasant tax surprise next April.

3. The charitable "cover charge."

Starting in 2026, charitable contributions face a new floor: You can only deduct gifts that exceed 0.5% of your AGI. On income of $800,000, your first $4,000 in donations provides zero tax benefit.

Strategy: Use bunching. Instead of annual gifts, contribute a larger sum (e.g., $50,000) to a donor-advised fund (DAF) in a single high-income year to clear the floor for a meaningful deduction.

4. The 2/37ths deduction limit.

If you're in the 37% bracket, the OBBBA now caps the value of your itemized deductions at 35 cents on the dollar.

This 2% gap makes above-the-line deductions — such as 401(k) contributions and health savings account (HSA) funding — far more valuable because they reduce your income before this cap is applied.

Equity compensation: Where strategy makes the biggest impact

Company stock is often the largest component of executive pay and the primary source of complexity:

Restricted stock units. RSUs are taxed as ordinary income at vesting. If you have the cash to cover the taxes, holding the shares allows future growth to be taxed at lower long-term capital gains rates.

Stock options. Nonqualified stock options (NQSOs) generate ordinary income at exercise. Incentive stock options (ISOs) offer potential capital gains treatment, but the lower 2026 AMT thresholds make them "riskier" than in years past.

Too often, executives, especially those deemed control persons subject to Section 16 reporting, overconcentrate their wealth in company stock.

In addition, there's often internal pressure from the C-suite for high-level executives of publicly traded companies to retain their stock. This can create difficulties in adequately diversifying one's wealth while still indicating confidence in the company.

Advanced executive moves

To maximize efficiency, executives should look beyond the basic 401(k) limits:

The mega backdoor Roth. If your plan allows for after-tax contributions, you can potentially funnel an additional $47,500 into a Roth 401(k) for 2026 (up to the total $72,000 IRS limit), where it grows tax-free.

The PTET workaround. If you're a small-business owner or have consulting income, the pass-through entity tax (PTET) election allows your business to pay state taxes at the entity level. This bypasses SALT income thresholds and remains a key tax strategy under the OBBB.

Deferred compensation (nonqualified deferred compensation or NQDC). These plans allow you to delay income — and the 37% tax hit — until retirement, when you might be in a lower bracket.

However, they're governed by strict Section 409A rules. One wrong move can trigger a 20% excise tax penalty.

Distribution elections under deferred compensation are critical — it makes sense to consult with an adviser to determine how much to defer and what distribution election is most advantageous.

The bottom line

Most executives leave money on the table because their equity, retirement and charitable strategies aren't managed in concert with one another.

In the OBBBA era, these elements are interconnected. Success requires a coordinated look at how a move in one area changes the math in another.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

Memory chips traditionally see booms and busts. Strong demand causes prices to rise, then new supply hits the market and prices fall. Rinse and repeat.

That cycle has been upended, at least for now. Massive demand from the artificial intelligence frenzy has created severe shortages and prolonged price hikes. Top memory makers Micron, Samsung and SK Hynix have seen revenue, profits and stock prices explode.

Is the memory market different this time?

Many analysts and investors are betting that the market has fundamentally changed. In a recent investing presentation, Micron seemed to reflect the sentiment, saying that "the memory industry has been structurally transformed by the proliferation of AI."

But it’s not likely the AI boom will end memory’s cyclical nature. "The core tenet of cycles is still very much part of the story," says William Kerwin, an analyst at Morningstar. "The key question for investors is when this cycle peaks and how far it falls thereafter," Kerwin wrote in a recent Micron research note.

Kerwin says that memory makers still don’t want to overbuild because when you have oversupply, pricing crashes. Companies also don’t want idle capacity at hugely expensive chip plants. "Demand can change on a dime," he says.

Chipmakers have big expansion plans underway, but new factories take a long time to build, and "no major greenfield additions across the industry are expected to matter before 2028," according to a recent report by market research firm Omdia.

"Major memory manufacturers have internalized the lessons of previous cycles," said Soo Kyoum Kim, an analyst at IDC, in a recent article. "They are exercising deliberate capacity discipline" by prioritizing advanced AI products and not rushing to fill every order.

However, this unprecedented upswing will last years. A downturn is expected in 2029, according to Kerwin, when more supply becomes available from major new manufacturing plants.

Memory chip sales have absolutely skyrocketed

Global memory chip revenue is forecast to hit about $803 billion this year, according to World Semiconductor Trade Statistics. For perspective, that’s about the same as the entire semiconductor market in 2025, which was $796 billion.

This year, memory revenue will nearly double the value of all logic chips, a category that includes chips from Nvidia, Intel, Broadcom, Qualcomm, Apple and many others. Memory chip revenue is a driving force behind overall semiconductor revenue being set to reach an astronomical $1.5 trillion this year and nearly $2 trillion in 2027.

Micron’s recent third-quarter results highlight the trend. The company saw quarterly revenue explode 346% year-over-year to $41.5 billion. In 2026, revenue will be nearly $140 billion, with sales set to hit $340 billion in 2027, according to a Morningstar forecast. Back in in 2023, the U.S. memory chipmaker had $16 billion in revenue.

Chipmakers still want to avoid a painful crash and will continue to exercise discipline over supply, ready to respond if memory prices sink. Another recent tactic is using long-term contracts to smooth the ups and downs of demand. Micron inked 16 multi-year deals worth $22 billion to start, for example.

Even in a downturn, global memory revenue will remain at a far higher level because of AI demand. Prices will be higher than the pre-AI boom, too. "We're not making a call that AI demand is going to slow down," says Kerwin. Rather, the bearish call is that a glut of supply brings prices back down.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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To help you understand what is going on in the economy and beyond, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we publish many (but not all) of our forecasts a few days afterward online. Here’s the latest...

Car sales will generally hold up this year. But affordability is a growing buyer concern. Here’s what to know if you’re in the market.

Dealerships will remain relatively busy, with about 16 million cars and light trucks sold this year, in line with 2025. Despite sticker shock, shoppers are still finding ways to afford a new vehicle. While car prices aren’t rising as swiftly now, with the average transaction price at $50,000 lately, financing and car insurance costs have surged. On average, insurance premiums have risen by 54% in the past five years. Even for buyers with good credit, auto loan rates are up by a percentage point. Folks with lower credit scores face significantly higher rates.

Borrowers have been stretching out their car loans to achieve a bearable monthly payment, even though that means paying more in interest during the loan. A third of loans to finance new cars last six-plus years.

There may not be many deals to be had now. But there are ways to save, especially for folks who are flexible on the make, model or vehicle options.

• If you can live with the base model of the car you want, do it. The difference between the cheapest and priciest trims of a given vehicle can be hefty. For example, most buyers of Toyota’s ever-popular RAV4 opt for the upscale XSE and Limited trims instead of the base LE, and pay $9,400 to $11,400 more for the added amenities.
• Note which brands have more or fewer cars in stock. Toyota and Honda have the leanest inventories, which generally means less room to bargain. Stellantis, the parent company of Jeep, RAM, Dodge and Chrysler, has the most cars on dealer lots now.
• Hybrids continue to sell well, now making up 14% of total sales. Buyers who target nonhybrid versions of a given model may face less pressure to pay up. You may have better options in the used-car market, given the high level of leasing in recent years.
• Low-mileage vehicles coming off lease can be good deals, and offer good warranties if sold through manufacturers’ certified pre-owned programs. Depreciation tends to be higher on fancier trims of used cars…good for second owners.

Automakers continue to lean on pickup trucks and SUVs as buyers’ interest in sedans continues to wane. Tesla just axed its flagship Model S sedan. Cadillac will soon have just one sedan in its lineup. Ditto for Acura. Coupes are even rarer.

Also note the budding return of small pickups. With full-size trucks so big, and even midsize models inflating in size, many buyers pining for compact work trucks who have felt left out are starting to get more options. Ford’s compact Maverick pickup has been a strong seller. Start-up Slate Auto is now taking orders for its two-door truck, which is electric, smaller than a Corolla, and starts at $24,950. Ford is readying a rival to the Slate, also electric, and Toyota is rumored to be mulling a small hybrid pickup.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Most business owners know they need capital to grow. Far fewer know how many doors are actually open to them — or that their bank's rejection letter is often the beginning of the conversation, not the end.

Through many years of setting up business financing deals in a wide variety of sectors including commercial, manufacturing, healthcare, hospitality and real estate, I have seen some of the most capable entrepreneurs forgo countless opportunities that could have made them millions due to a simple lack of awareness about where to find money and how to secure it.

Why your bank said no (and why that's not the whole story)

Traditional banks are extremely risk-averse entities. These entities are run according to strict regulation requirements and have to see at least three years of solid performance, a large amount of collateral and no problems in either the business or its owner's credit.

If your business is new, operates in an unstable market or is undergoing some transformation — for instance, an ownership change, sudden growth or loss-making period — then the bank algorithm will red-flag your application even before your file gets reviewed by a person.

This does not mean that your business is not creditworthy, just that it operates outside of the risk tolerance box of that particular bank. The world of commercial lending is much larger than a few big banks.

A map of the commercial lending landscape

Understanding your options starts with understanding who lends what — and why. Here's a practical breakdown:

SBA loans (7(a) and 504 programs). These remain the gold standard for businesses that can qualify. SBA 7(a) loans go up to $5 million and can be used for nearly any business purpose.

The 504 program is purpose-built for major fixed-asset purchases — equipment and commercial real estate — and often features below-market interest rates. The trade-off is time: SBA loans involve significant documentation and can take 60 to 90 days to close. If you have the runway, they're worth pursuing.

Non-bank commercial lenders. This category includes credit funds, debt funds and private commercial lenders who operate outside the traditional banking system.

They move faster — often closing in two to four weeks — and are generally more flexible on deal structure, collateral types and borrower profile.

Rates are higher than bank rates, but for many borrowers, the speed and certainty of execution more than justify the premium.

Revenue-based and asset-based financing. For businesses with strong receivables or recurring revenue but thin equity, asset-based lending (ABL) and revenue-based financing offer a compelling alternative.

Instead of underwriting your credit profile, the lender underwrites your assets — your invoices, inventory, equipment or contracts.

A distribution company with $3 million in outstanding invoices may qualify for a $2 million revolving line of credit even if its balance sheet looks modest.

Factoring and invoice financing are subsets of this category and work especially well for B2B businesses with long payment cycles.

Industry matters more than you think

The often-overlooked variable in business lending is industrial specialization. Often, lenders have niches in which they can operate to their advantage since they have ample experience and already know what to expect.

For example, one who has lent money to 50 car washes knows all about them from the economic point of view better than a generic lender.

Industries with active, specialized lending markets include:

• Healthcare and medical practices (including dental, veterinary and behavioral health)
• Franchises (many lenders maintain franchise brand registries that fast-track approvals)
• Commercial real estate and mixed-use development
• Trucking, logistics and fleet operations
• Hospitality, hotels and food service
• Manufacturing and industrial equipment
• Professional services (law firms, accounting firms staffing agencies)

You can visit US Professional Funding's website and US Medical Funding's website for more information on these industries. (I am the vice president of Business Development at both US Professional Funding and US Medical Funding.)

When you're seeking capital, your industry isn't just a detail on the application — it's a primary filter for which lenders are most likely to say yes.

The five things lenders actually look at

Commercial underwriting is more nuanced than personal credit, but it follows a consistent logic. Most lenders evaluate five core factors, sometimes called the Five C's of Credit:

Cash flow. Can the business service the debt from operating income? Lenders typically look for a debt service coverage ratio (DSCR) of at least 1.25x — meaning the business generates $1.25 in net operating income for every $1 of annual debt payments. Know your number before you apply.

Collateral. What assets secure the loan? Real estate, equipment, inventory and receivables all carry value on a lender's balance sheet. Even if you're cash-flow positive, lenders want a secondary repayment source.

Capital. How much equity does the owner have in the business? Lenders want to see skin in the game. A highly leveraged business with minimal owner equity is a harder credit story.

Conditions. What are you using the funds for, and does the use make business sense? Expansion into a new market is a different risk than covering operating losses.

Character. Your credit history, your track record and the people running the business. Personal credit scores above 680 are generally the floor for most commercial lenders; 700-plus significantly broadens your options.

How to prepare before you apply

The single biggest mistake business owners make is approaching lenders unprepared. A strong loan package doesn't just improve your odds — it dramatically shortens your timeline and often secures better pricing.

Here's what to assemble before you start:

• Two to three years of business tax returns (and personal tax returns for any owner with 20%-plus ownership)
• Year-to-date profit and loss statement and balance sheet, prepared by a CPA
• Three to six months of business bank statements
• A one- to two-page executive summary of your business and the purpose of the loan
• A debt schedule listing all existing loans and obligations
• Documentation of collateral (appraisals, equipment lists, accounts receivable aging)

If your financials show a challenging year, don't wait for the lender to ask about it. Write a clear, factual explanation — an addendum or letter from your accountant — that addresses what happened and why the business is positioned for stronger performance going forward. Lenders respect transparency. They don't like surprises.

The bottom line

Access to capital is one of the most powerful levers a business owner has — for growth, for acquisition, for weathering downturns and for building enterprise value. The commercial lending market is deeper and more flexible than most owners realize.

Your next step: Pull your last two years of tax returns and your most recent financial statements. Calculate your DSCR. Get clear on what you're asking for and why. Then have a conversation with a lender or broker who specializes in businesses like yours — not just the bank where you have your checking account.

The capital is there. The question is whether you've positioned yourself to access it.

The information provided in this article is for educational purposes only and does not constitute financial advice. Loan availability, terms and eligibility vary by lender, borrower and transaction. Consult with a qualified financial or lending professional regarding your specific situation.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Selling a business is often framed as a transaction: A valuation, a deal structure, a number on a page. But, in reality, it can be one of the most significant transitions an entrepreneur will ever face.

While valuation, deal structure and tax outcomes are key considerations, they are just part of the equation. The emotional, familial and lifestyle implications can be just as consequential.

All of these factors should be taken into account during the upcoming wave of anticipated exits. According to the Exit Planning Institute, roughly 75% of business owners plan to sell within the next decade, representing an estimated $14 trillion expected to change hands.

Yet only 20% to 30% of businesses that go to market actually sell.

Addressing this gap requires a more integrated approach, which changes the expectations placed on advisers. In many cases, the adviser role extends beyond transaction support into guiding clients through a sequence of financial and personal decisions that unfold over time.

By acting as a coach, advisers can help business owners by providing continuity and direction throughout a process that is both technically complex and personally consequential.

An adviser's role starts quite early in the process, commencing with how "readiness" is defined.

Start with readiness

Wanting to sell and being ready for a sale are two very different things, and preparation extends well beyond the business itself. True readiness often involves aligning financial strategy with personal priorities, long-term goals and life after the transaction.

Often, it comes down to two questions:

• Is the business ready for a sale?
• Does the owner understand why he or she is selling?

From a business perspective, readiness should be relatively straightforward: Clean financials, operational scalability and a credible growth story.

However, from an owner's perspective, it can be much more complex. It involves understanding what the sale is intended to accomplish and what comes next.

Advisers often frame this as balancing "economic alpha" with "life alpha." Maximizing valuation certainly matters, but there also should be clarity about the next phase.

Without that clarity, even a well-executed exit can feel incomplete or unsatisfying, potentially straining relationships. Owners who have spent decades building something often find themselves asking a difficult question once it's gone: What now?

Assemble the right team

Most entrepreneurs only sell a business once, which makes assembling the appropriate team of professionals one of the most important decisions in the process.

A typical deal involves a wealth adviser, an M&A attorney, an investment banker and an accountant. Each plays a discreet role, from structuring the deal, to managing negotiations and mitigating tax impact.

However, isolated expertise isn't enough. The team should operate in alignment. When communication breaks down or priorities diverge, friction quickly builds.

Accordingly, effective teams tend to function as a unit — anticipating challenges, coordinating decisions and keeping momentum intact when the process becomes complex.

Plan for the proceeds

A liquidity event can often create sudden wealth, which, depending on how it's handled, can potentially lead to fulfillment or a void. Effective plans start with clear requirements and goals. Proceeds are typically allocated across three areas:

• Lifestyle needs
• Philanthropy
• Wealth transfer

It's key that advisers account for how clients want to live post-sale, whether that involves more travel, hobbies or other meaningful experiences. Without that level of intentional planning, many business owners struggle with a loss of structure once the demands of running the business disappear.

Philanthropic strategies, such as donor advised funds (DAFs), should reflect genuine convictions and the family's broader values, rather than being driven solely by tax considerations.

Wealth transfer is often more nuanced. The most complex decisions often involve children, including when and how to introduce wealth in a way that supports independence, rather than undermines it.

These discussions with the next generation can shape family dynamics for years. Done thoughtfully, it may help reinforce independence. Done improperly, it can create lasting tension.

Prepare for the emotional roller coaster

At some point, the tone inevitably shifts. Once a letter of intent (LOI) is signed, control begins to change hands. Due diligence introduces scrutiny. Negotiations can become more adversarial.

It's often difficult for entrepreneurs to go from building a business to suddenly defending it in terms of valuation and financials.

Separating personal identity from the business takes time, which is why exit planning may work best as a multiyear process. And it's important to note that the emotional complexities don't typically end when the deal closes — they simply evolve.

Post-sale, owners face new questions around purpose, time and relationships. As wealth increases, its marginal value tends to decline. In its place, concerns arise around health, connections and how the client's time will be spent — areas commonly overlooked during the deal.

Execute pre-sale planning strategies

Preparation before the sale can meaningfully impact the outcome. Strategies such as gifting shares into trust structures ahead of a liquidity event may reduce tax exposure by leveraging discounted valuations.

Family limited partnerships can also facilitate wealth transfer, while allowing owners to retain some control.

But these approaches come with trade-offs. Without clear communication, they can create confusion or tension around access and fairness.

Concentration risk should also be considered, since many owners have most of their net worth tied up in the business.

Interim solutions, like term life insurance, may provide protection leading up to the transaction.

Avoid the common post-sale mistakes

When the deal closes, many owners initially increase spending, especially on physical assets like vacation homes, cars or other hobbies. But this phase typically doesn't lasts.

Within a few years, priorities tend to shift. Instead of acquiring more physical assets, many sellers focus on experiences, relationships and how they spend their time.

Without a clear plan, that transition can feel disjointed. A disciplined approach to investing and spending may help support long-term sustainability.

Family dynamics can also become strained if wealth is introduced too quickly or without context. Preparation, once again, is beneficial.

The deal is done, and the real work begins

A business exit tends to compress a wide range of decisions into a relatively short period of time. Once that process is in motion, the focus naturally shifts toward execution, and there is less room to revisit the broader questions that emerge alongside the transaction.

For advisers, that makes the timing of engagement important. The work that often has a meaningful impact often takes place earlier, when clients can approach decisions around tax strategy, capital allocation, family dynamics and personal priorities with more perspective and fewer constraints.

Bringing those elements together requires coordination across disciplines and a willingness to operate beyond the immediate demands of the deal.

In that context, an adviser can play the role of a coach, helping business owners through the peaks and valleys of the dealmaking process and the unfamiliar terrain that comes with it, from both a financial and personal perspective.

We do not endorse, approve or make any representations as to the accuracy, completeness or appropriateness of any part of any content linked to from this article.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

When IPO activity picks up, client calls tend to follow. A high-profile company goes public, the financial press lights up, and suddenly, clients who have never considered investing in an IPO are asking whether they should get in.

These conversations can be genuinely useful, but they can also go sideways quickly if advisers aren't prepared to manage expectations alongside the enthusiasm.

Having a clear framework for these conversations helps. Here's how I think about it.

1. Start with the fundamentals

Before getting into access or mechanics, it helps to anchor clients in why companies go public in the first place. While an IPO creates an investment opportunity for outside investors, it's primarily a capital-raising strategy.

The company needs funding to grow, pay down debt or give early investors and employees a path to liquidity. Going public is how they get it.

In exchange, the company accepts significant new obligations: Regular SEC reporting, public scrutiny from analysts and shareholders, plus ongoing regulatory oversight. These responsibilities shape how the offering is priced and who gets access first.

2. Walk clients through the process

Many investors have a vague sense of what an IPO is, but not a clear picture of how one comes together. Walking them through the basic mechanics sets up the risk conversation more naturally.

The company selects investment banks (underwriters) to manage the offering and determine pricing, share volume and allocation. Then, the company files a registration statement with the SEC, which includes a prospectus with financials, the business model and a detailed risk factors section.

Institutional investors get a first look during the "roadshow," where company leadership presents details about the IPO to build demand.

The offering price is finalized the night before trading begins and shares hit the market.

Educating investors on the process is important because your clients may assume IPO investing is as simple as clicking "buy" on their brokerage app. But most offerings aren't straightforward, and explaining why to your clients helps set the right expectations.

3. Clarify the three access points

When a client asks, "How do I get in on an IPO?" the honest answer is that it depends on when you want in and what you have access to. (I typically hate "it depends" answers, but it truly applies in this situation.)

There are three entry points, each with a meaningfully different profile:

Pre-IPO secondary markets. Before a company goes public, some shares may be available through secondary platforms, purchased from early employees or existing investors seeking liquidity.

This path is generally limited to accredited investors, involves limited disclosure and comes with transfer restrictions and higher operational complexity. Pricing can vary significantly from the IPO price, and fraud risk is elevated.

If a client is interested in this option, the channel matters enormously. Only established, regulated platforms with clear documentation of ownership and custodial arrangements should be considered.

IPO allocation. Participation in the actual offering, at the offer price, typically flows through broker-dealers that are part of the underwriting group. Institutional investors receive priority, and retail access can be limited.

In high-profile deals, demand often far exceeds available shares. Clients should understand that submitting interest isn't a commitment, and allocation isn't guaranteed.

Anyone promising guaranteed access to a hot IPO is waving a bright red flag.

Post-IPO trading. Once shares list on a public exchange, any investor can buy them through a standard brokerage account. This is the most accessible option and the one with the least operational complexity. It's also where most individual investors will land.

The trade-off is that newly public companies often see elevated volatility in the early weeks of trading as the market finds its footing.

We saw this in action with the SpaceX IPO earlier this year. The company's stock (SPCX) increased by more than 50% in the four days following its debut, then dropped back down around initial pricing in the subsequent two weeks.

4. Reframe the 'first-day pop' conversation

IPOs attract a lot of attention around first-day performance. A company opens 30% above its offer price, and it looks like a missed opportunity. If it drops 20% on day one, suddenly the whole asset class gets a side-eye.

Neither reaction is especially useful for long-term investors.

First-day price movements reflect a combination of limited float, pent-up retail demand and short-term sentiment, none of which are a reliable signal of where the company will be in three to five years.

Early enthusiasm has a way of fading once the lockup period expires and insiders can sell. Clients who buy in based on first-day momentum often find themselves holding a position they don't fully understand at a price that was set by very different market forces.

This is a good moment to bring the conversation back to fundamentals. Some good questions to ask:

• Does the client understand the company's business model?
• Have they looked at the prospectus, particularly the risk factors section?
• Does the offering fit within their time horizon, risk tolerance and overall portfolio composition?
• What percentage of their holdings would this represent, and are they comfortable with that level of concentration?

5. Tie it back to the plan

One of the most effective ways to manage IPO conversations is to redirect them toward your client's financial plan. An investment that generates a lot of headlines isn't automatically a good fit.

An IPO that most investors can't access at the offer price, carries meaningful volatility risk and represents a company with an unproven public track record deserves the same disciplined evaluation as anything else in the portfolio.

Access and hype are not the same thing as opportunity. Helping clients see the difference, and then evaluating each situation through the lens of their individual goals and risk profile, is exactly the kind of value a good adviser provides.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

It's not a secret that AI adoption is becoming increasingly commonplace in Corporate America. But it's not just giant corporations that are using it. A 2026 Intuit QuickBooks survey (PDF) found that 77% of small and midsize businesses now use AI regularly, up from 48% two years ago.

If you own a small business, you may be looking to increasingly lean on AI tools to improve productivity and save on costs. In fact, the same QuickBooks survey found that 78% of US respondents reported productivity gains from AI use, and 42% reported revenue gains. For large companies, a PwC study found that investing at least 1.6% of revenue in AI tools resulted in 9.5% growth (as measured in EBITDA). Moreover, AI can help create documented workflows and efficiencies that can give you a higher exit price when you're ready to sell up and retire.

But what if those tools are making some of your employees' tasks obsolete?

On a scale of 1-5, which of the following describes your current views of AI's impact on your productivity? (Asked of U.S. small businesses.)

Letting employees go is a gut-wrenching decision for any small business owner. But when your personal finances are at stake, sometimes you may need to make hard choices.

If you're a business owner who's looking to power through for a few more years and sell your business to fund your retirement, you need your company to be profitable and competitive. That means shedding unnecessary costs and using technology to your advantage. Here's how to reconcile the financial side of the equation with the moral and emotional side.

Look at AI as a time-saver more than anything else

AI may be able to take over some of the tasks your employees handle now. But that doesn't mean those employees suddenly lose all of their value.

Paul Carlson, CPA and managing partner at Law Firm Velocity, a company that provides virtual CFO and financial services to law firms across America, says, "You don’t want to make decisions out of guilt and keep carrying payroll that no longer makes financial sense for the business."

He explains, however, that just because AI is saving you time doesn't mean your employees with years of business knowledge and experience are suddenly obsolete.

"What helps you make a more mindful decision is to first see whether the freed-up time can actually improve some other aspect of your business," Carlson says. Those aspects could be things AI can't handle, such as strategic decisions that require more human intervention and judgment.

Carlson says that discovering the time-saving power of AI could position you to make better use of your employees' skills rather than letting them go.

"In most small businesses, your employees will most certainly end up wearing multiple hats over time. So even if AI suddenly saves someone five or six hours a week, that doesn’t necessitate that the employee is no longer able to play a part, especially given the kind of context they have about what works for your business and what doesn't," he explains.

Carlson also points out that if you're running a lean operation, you may not be tracking the various ways your employees are contributing. Before letting them go, it pays to take a closer look.

"Some employees are integral when it comes to catching mistakes," he says. "Others are great at answering questions nobody else has time to deal with, or take great pride when following up with clients. All those elements may have had a big role to play in your company’s reputation and how satisfied clients are with you."

E.J. Simonsen, Founder & Finance Advisor at EIDLexit, agrees. His best advice? "Replace tasks, not people."

"Routine administrative labor can be handled by AI," he says. "Use the savings of time to transition employees into higher value endeavors such as customer service, business development, process improvement, or client retention. Those domains are often higher impact to revenue and significantly harder to automate. This enables you to be competitive while still investing in your team."

Proper AI adoption could make your business more valuable

If retirement is on the horizon and you're within 10 years of an exit plan, you need a sound strategy that enables your business to maintain its edge without blowing money on unnecessary costs.

Kevin Williams, founder of Ascend AI, advises C-suite executives and small business owners on AI adoption, governance, and workforce readiness. And he says that given your timeline, you have a prime opportunity to use AI in a way that could make your business more valuable without shedding headcount.

"Companies where AI is used strategically and where the team knows how to leverage it fetch a higher price," he insists. "Such companies are viewed as mature, where things work efficiently. Buyers pay a premium for that."

Williams also says, "Using AI to increase productivity of each employee by 20-30% and thus build a lean and competent organization that is highly valued by a potential buyer [several] years down the road — that's how to retire successfully."

Simonsen says that ultimately, a business that runs well and has good and skilled people will generally be worth more. On the flip side, if AI adoption makes a business feel cold, automated, or robotic, client retention might drop.

"Balancing compassion and business decisions is part of establishing a better company," he says.

Of course, successfully implementing AI requires an investment. And training employees to use it could take time away from daily operations while your staff gets up to speed. But if you're willing to sacrifice some short-term gains, you may find that AI boosts your company's profitability in the long run and puts you in a stronger position once you're ready to sell.

It's also important to be transparent with your employees about how you're looking to integrate AI. Nothing hurts employee morale like the fear of being replaced by a machine. Emphasize that you're adopting AI tools to make their jobs easier, not to replace them.

Take guilt out of the equation

It's natural to feel bad about the idea of letting hard-working employees go. But if you use AI the right way, you may not have to.

"If you feel guilty about AI, then this is because you miss the point entirely," Williams says. "Guilt doesn't arise from using AI technology. It comes from the choice you made [regarding] AI use."

Of course, you may come to the realization that one or two roles at your company are, in fact, obsolete in the wake of AI, and that you can't justify the cost of labor. In that case, it's important to do your best to ethically offboard those employees.

If you can afford to be generous with severance, it could ease the financial blow for those impacted while helping you sleep better at night. Be empathetic but pragmatic.

But all told, Williams says, using AI to empower your employees rather than replace them could set you up for a lot more financial success. And that way, you can forge forward with your personal financial plans without the remorse that might come with destroying other people's livelihoods.

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To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

If you find a deal on a PC or tablet, you may want to act fast. Prices will only go up from here.

The memory crunch we warned about in March, which was hammering the smartphone and PC market, has only gotten worse.

Apple’s recent price hikes are the biggest shift in the consumer electronics market so far, with the massively popular brand raising prices 17% to 30% on laptops and tablets. Apple is likely to raise iPhone prices later this year, too. CEO Tim Cook blamed skyrocketing memory chip costs, saying he’s never seen anything like it in 40 years.

"Tight memory supply, due to immense AI infrastructure demand, has pushed prices 3-4 times higher than they were at the end of 2024, with further rises likely," says William Kerwin, an analyst at Morningstar, in a recent research note. “Memory has accounted for about 10% of an iPhone's cost, but inflation threatens to raise the cost of building an iPhone by 20% or more.”

AI infrastructure is hogging the manufacturing capacity of memory chip makers such as Micron, SK Hynix and Samsung. That leaves far less capacity for consumer electronics, causing vendors to scramble and swallow extremely high prices. Any new manufacturing capacity coming online in the near term will be prioritized for AI, not consumer gadgets.

New Apple pricing (Source: Associated Press ):

• MacBook Neo: Now $699, up from $599
• 512-gigabyte MacBook Air: Now $1,299, up from $1,099
• 1-terabyte MacBook Pro: Now $1,999, up from $1,699
• 128-gigabyte iPad Air: Now $749, up from $599
• 256-gigabyte iPad Pro WiFi: Now $1,299, up from $999

It’s hard to predict when the memory price hikes will cool off. "The supply-demand imbalance is expected to persist beyond 2027 in key segments," according to a recent article by Soo Kyoum Kim, an analyst at IDC. "We expect memory inflation to continue through 2028, but for prices to come back down thereafter as new supply comes online,” says Kerwin.

Sellers besides Apple had already been raising prices, and there’s more to come. "We also expect other PC and tablet brands to follow Apple’s example," said David Naranjo, an analyst at CounterPoint Research, in an online post. "They may raise prices on select products, cut discounts on entry-level models, or adjust their product lines to focus more on premium devices."

Consumers and businesses don’t have many options. One strategy is to hold on to PCs and phones longer. Many businesses will do this, extending hardware lifecycles beyond the traditional three to five years, at least for some work devices. That’s not easy to do, since newer models come with more-powerful processors and other improvements, which are often necessary to harness in-demand AI tools.

Used smartphones are another way to save. Refurbished phones are closely inspected and are a great option if you don’t mind a device that is two or three years old. When buying new, trade in your old phone to knock off at least some of the net cost.

Apple’s low-cost laptop, which uses an older iPhone chip, is still a good deal. The Neo’s new price is $700, up from $600. Premium smartphone vendors have low-cost lineups, too, such as the Apple iPhone 17e, Google Pixel 10a and Samsung Galaxy A37 5G. They cost around $450 to $600 (for now).

Shoppers should closely vet the tech specs of devices. Make sure an item that looks like a deal doesn’t come with hidden tradeoffs. A PC priced about the same as last year may come with far less storage, for example. Check new configurations of memory storage and random-access memory (RAM).

For consumers, soaring memory prices may sting the most for external hard drives, used to back up files, photos and videos. Be prepared to do a double-take at how much prices have skyrocketed compared with a year or two ago.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

Artificial intelligence has a growing list of productive business uses. But it’s also leaving companies and individuals more vulnerable to cyberattacks.

The speed and volume of threats are the biggest shift. AI is “accelerating attacks from months to hours,” according to a Verizon data breach report from May. And recent AI advances have sparked new panic over critical digital infrastructure used by big banks, governments and other organizations.

Cutting-edge AI models stoke new fears

AI cyber fears hit a boiling point this year. It started with Anthropic’s Mythos AI model, which rapidly found and exploited security flaws in widely trusted software after its April launch. OpenAI has a similar capability. Both have partnered with security firms such as Cisco, Palo Alto Networks and CrowdStrike to help companies patch software. The U.S. government is very concerned and has recently banned foreign nationals from accessing Mythos.

Some advice for businesses:

• Don’t panic. The threat requires attention, but it’s not totally new.
• Focus on patching critical systems first and regularly push software updates.
• Make sure only approved people can use certain digital tools by having strong access controls.
• Use multifactor authentication — the process of combining a username with a password and a PIN or a biometric for logins.
• Physical security keys, such as Yubico’s YubiKeys, are another way to protect against unauthorized access.
• Other essential cyber protections, such as firewalls and antivirus scanners, help fortify defenses.

Note that AI will help find and fix flaws faster, too. “Bad guys can use AI to find vulnerabilities and rapidly create attacks, and software developers should be able to use the same technology to more rapidly (as in before releasing bad code) create hardened versions of code,” noted John Pescatore, director of emerging security trends at the SANS Institute, in an April newsletter.

Other leading AI threats that require urgent attention

The risks of agentic AI
Agentic AI does complex multi-step tasks, from building an app to managing inventory. “AI agents aren’t coming, they are already here,” said Saira Mohammed, Microsoft’s chief security advisor, at a recent Gartner cybersecurity conference in Maryland. 80% of Fortune 500 companies are deploying AI agents, according to Microsoft.

Agents risk data leaks, unauthorized transactions, compliance violations and other harms. “Agents can expose more data in five minutes than a careless employee could in a month,” said Mohammed. Companies can implement guardrails and a set of permissions to limit what’s allowed. Tools can track AI usage, risky actions, stolen credentials, off-hours use, data access and more. These include Microsoft Agent 365, which tracks agents from both Microsoft and third parties, and ReliaQuest, which has a tool to track Anthropic’s Claude.

Threats from AI chatbots
Chatbots such as OpenAI’s ChatGPT and Google’s Gemini have security risks that are hard to mitigate. These include users crafting prompts to bypass guardrails; the chatbots divulging company secrets or data; or AI systems being corrupted by data they’re trained on. Firms can start by blocking or restricting certain prompts (the text workers type into the chatbot). Specific AI tools can be blocked on company devices and networks, and sensitive company data can be blocked from public AI tools.

Also have an approval process for new uses of AI to ensure security, privacy and regulatory compliance, said John Murphy, a Gartner analyst, at the conference.

Fears about deepfakes
AI makes it easy to fabricate videos and photos of real or fake people. Deepfakes can infiltrate video conferences, place phone calls or side-step biometric authentication. One example is attackers impersonating an executive to request money transfers from an unsuspecting employee. Detection tools from vendors such as iProov, Pindrop and Reality Defender scan audio and video for fakes, but they’re not foolproof.

Studies show AI deepfake detection working better in the lab than in the real world, said Christine Lee, a Gartner analyst, at the conference. Companies should educate employees about the attacks, along with using strong login security. Low-tech approaches should be combined with high-tech ones, such as asking personal questions to verify someone’s identity.

Employees misusing AI
Company guardrails need to be built into chatbots and agents, as well as clear guidance for employee use. Specify what data and files workers are allowed to upload into AI tools, for example. Shadow AI, the use of unapproved AI at work, has surged over the past year and is one of the top ways company data is unintentionally leaked, according to the Verizon report.

Education helps, such as AI literacy training about possible attacks, data risks and how AI works. Even AI power users need training, as they may not realize all the cyber risks. Also track AI tools to uncover suspicious activity, ranging from data leakage to shadow AI.

Cyber best practices are still the best line of defense

In addition to these AI threats, there’s still ransomware, phishing attacks, software supply chain risks and much more.

Security experts say to focus on the basics. Inventory your data and devices. Encrypt data and keep backups. Discard unused data and IT. Use automated patching. Use e-mail filters to fight phishing. Change default credentials on IT systems and apps. Keep an updated incident response plan for data breaches. Have regular cyber training.

Trustworthy resources for AI threats include MITRE Atlas and NIST’s AI Risk Management Framework.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Something is happening in advisory practices across the country. The clients who once fit neatly into a financial planning model have changed, and the gap between what they expect and what most firms deliver is getting harder to ignore.

This trend is showing up in client conversations and retention numbers. It's also recurring in conversations I'm having with advisers who sense the model that got them here may not be enough to carry them forward.

While this shift might be concerning to some, I see it as a real opportunity — at least for advisers who are willing to see it that way.

The client has changed

The wealth management industry is in the middle of what may be the most significant client reset in decades. Clients today are approaching wealth differently than they did even a few years ago, and their expectations of the advisory relationship are evolving just as quickly.

Clients are no longer solely focused on portfolio performance. Instead, they want advice that reflects their values, goals, time horizon and definition of success. Generic strategies and one-size-fits-all portfolios are becoming increasingly out of step with what today's clients expect from a financial relationship.

Many clients are also looking for what I call Return on Time Invested, or ROTI. They want advice that buys back hours and funds experiences, not just accumulation. They're less interested in being managed and more interested in being understood.

This shift creates a meaningful challenge for advisers whose practices were built around a model designed for a different type of client. It's also a great opportunity for a reset of the adviser-client relationship itself.

Firms that don't adapt risk losing those relationships as client expectations continue to rise.

Client expectations have outpaced what most firms deliver

For most of the industry's history, the advisory model has been transactional: Win clients, manage portfolios and compete on performance and service. That model no longer matches what clients expect.

Today's clients don't experience their financial lives in silos. They don't separate their investment portfolio from their insurance coverage, estate plan or tax situation. They want someone who can see the whole picture and advise accordingly. They're looking for a better client experience.

The most successful firms are consistently delivering that experience, starting when a client first says yes and lasting throughout the duration of the relationship. They're offering proactive communication rather than reactive. They're providing tax-aware portfolio construction rather than performance-first allocation.

These firms deliver advice that is tailored to the individual, even across a large and growing client base.

Until recently, that kind of capability required infrastructure that only the largest firms could afford. While that's no longer true, it does require the right partners and a willingness to build something more intentional than most advisory practices have been in the past.

From transactions to relationships

The advisers who will thrive over the next decade aren't necessarily the ones with the most clients or highest assets under management (AUM). They're the ones who have built a systematically personalized client experience and the infrastructure to deliver it consistently.

The defining opportunity for independent advisers right now is the shift from transactions to teamwork — and it's one that plays directly to the strengths that independent firms already possess.

Independent advisers aren't steered toward proprietary products. The advice they give is genuinely theirs, and the relationships they build belong to them. As consolidation continues to reshape the industry, that clarity of purpose becomes a differentiator clients notice and value.

The question is how to build the experience that clients are looking for without losing what makes the independent model work. At AE Wealth Management, here's how we're helping advisers understand and make the shift:

• Whole-picture planning is the new standard. Clients expect their adviser to understand the full picture, not just their investment portfolio. Tools that integrate market-correlated and non-market-correlated investments, life insurance and annuities into a single planning view give advisers the ability to deliver comprehensive advice without doing all the heavy lifting themselves.
• Personalization is within reach. Direct indexing, tax-aware portfolio construction and preference-based customization used to require resources most independent firms couldn't access. The right platform partner can change that, putting sophisticated personalization tools in the hands of advisers who want to compete on depth of service rather than just breadth of offering.
• Systematization must be personal. The firms that are growing consistently have one thing in common: A repeatable, disciplined approach to the client experience. However, that doesn't mean it's generic. These firms are building processes that deliver a high-quality, personalized experience to every client, not just the top tier.
• Succession and continuity are part of the experience. Clients who trust an adviser want to know the relationship is protected over time. Advisers who think proactively about succession and preemptively design internal equity tracks and leadership development programs send a signal about the kind of firm they're building.

Consolidation is changing the competitive landscape

As I previously wrote in the article You Don't Have to Sell Out to Grow: A Case for Staying Independent as an RIA on Your Terms, private equity is reshaping the RIA competitive landscape at a speed that was hard to predict even a few years ago. Consolidation is creating real pressure on independent firms, but it's also clarifying something.

Clients are beginning to understand the difference between an adviser who is independent and one who operates inside a structure built for someone else's exit timeline. As that distinction becomes more visible, independent advisers who can clearly articulate their value and back it up with a consistently excellent client experience are gaining an edge that is difficult to replicate.

The advisers who will benefit most from the current opportunities are the ones who stop treating independence as a default and start treating it as a strategy.

Start with the client in front of you

These changes in wealth management can feel abstract until you zoom in on a single client relationship.

• What does that client expect from you today that they didn't five years ago?
• What does their next chapter look like?
• Does your practice have the tools and infrastructure to support it?

The advisers who are asking those questions and acting on the answers are the ones building something that lasts.

The client has changed. The model is shifting. The opportunity is real. The only question is what you will do with it.

This content is for informational use only and not intended as financial advice or advice designed to meet the needs of any particular situation.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

At both the federal and state levels, efforts are underway to give workers a retirement savings boost. In one of the latest moves, President Trump signed an executive order this spring designed to enhance the options for workers who don't have access to an employer-provided retirement plan. About 56 million workers fall into this group, or nearly half of U.S. private-sector workers ages 18 to 64, according to research from AARP.

The TrumpIRA.gov, set to launch by the beginning of 2027, will connect these workers, who often include independent contractors, small-business employees, part-time workers and self-employed individuals, to low-cost IRAs from private financial institutions. Workers will be able to compare IRAs based on cost, quality and investment options.

IRAs included on the platform will have to meet certain criteria. They can't require minimum contributions or balances, for one, and their overall net expense ratio can't exceed 0.15%. The menu of investments must include such options as target-date funds, which automatically alter their asset mix to become more conservative as the saver's retirement date approaches, and funds designed to protect principal on an ongoing basis.

The Saver’s Match

The White House initiative coincides with a government matching-contribution program that also starts next year, known as the Saver's Match, through which eligible workers can get a matching government contribution to their retirement accounts.

In 2027, you must have an annual income of less than $20,500, or $41,000 for those married filing jointly, to qualify for the maximum 50% match from the government. The match gradually phases out, and single filers who earn $35,500 or more, or joint filers who earn $71,000 or more, are ineligible for it. The income thresholds are indexed to inflation in future years. The government contribution is capped at $1,000, or $2,000 for married couples.

The Saver's Match will replace the Saver's Credit, a nonrefundable tax credit that taxpayers whose income doesn't exceed certain thresholds can take when they contribute to an IRA or workplace retirement plan. The maximum credit is $1,000, or $2,000 for joint filers.

Auto-IRAs

Some states are also taking measures to help workers who lack access to employer-sponsored retirement plans by providing automatic IRAs. Through these plans, certain employers that don't offer a retirement plan can enroll their employees to have money automatically deducted from their pay and deposited into an IRA, which is run by a state-approved financial services firm.

Employers can't contribute to auto-IRAs, but the accounts are eligible for the Saver's Match program. That could significantly increase participation in state auto-IRA programs, according to Pew Research Center, which surveyed people who don't have access to an employer-sponsored retirement plan.

At first, 84% of respondents said they were likely to participate in an auto-IRA program. That figure grew to 94% after they learned about the Saver's Match. And though 16% of respondents initially said they wouldn't likely use an auto-IRA, 52% of them expressed higher interest after they learned about the match.

States that offer Auto-IRAs

The following states have implemented or are developing automatic IRA programs, through which workers without access to an employer-sponsored retirement plan can have contributions automatically deducted from their pay and deposited into an IRA.

• California
• Colorado
• Connecticut
• Delaware
• Hawaii
• Illinois
• Maine
• Maryland
• Minnesota
• Nevada
• New Jersey
• New York
• Oregon
• Rhode Island
• Vermont
• Virginia
• Washington

This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to Kiplinger Personal Finance Magazine to help you make more money and keep more of the money you make.

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Every May, Small Business Month shines a spotlight on entrepreneurship. Just as the coverage slows down in June, so does visibility of small business ownership after launch.

The leap of faith, the ribbon cutting, the early momentum — these are all important moments. But they are only the beginning.

If a business' launch is the pilot, the real test is whether the business gets picked up for a second season. For most entrepreneurs, the real story is a tale of stabilization in the face of pressure — when and how they grow — and, ultimately, preparation for transition.

The data underscores just how complex that journey has become. Citizens' Q2 2026 Business Pulse survey showed that as global tensions increased, so did small business confidence.

Thirty-six percent of owners reported being extremely or very confident in the economy heading into the second quarter, up from 30% in Q1. The survey was fielded after the onset of war with Iran, making that rise in confidence reflective of a broader pattern: Small businesses are learning to operate and even plan for growth in uncertain conditions.

Resilience is the defining thread of today's small business. Small business ownership is not a moment; it is a lifecycle that changes with the seasons and is reborn with each generation.

At every stage, owners are making a different set of financial and personal decisions to position for what comes next.

What's possible

Every business begins with a bet on what's possible. Nearly half of small business owners (48%) expect revenue growth over the next three months, up from 43% the prior quarter, signaling an improvement in near-term expectations despite a volatile backdrop.

Business owners were largely confident that they could grow revenue and invest in their business; momentum at the outset is still driven by a belief in opportunity. That confidence trends upward quarter over quarter even in an uncertain environment.

But optimism at launch is only part of the equation. From day one, owners are navigating pricing decisions, cost pressures and access to working capital. Launch may be the moment that gets celebrated, but durability is what defines success.

That shift from starting to sustaining is where the real test begins. Broader economic conditions are felt most acutely during this stabilization stage.

Inflation remains the top concern for small business owners, cited by 43% of respondents, even after easing from 54% the prior quarter, while tariffs and global trade risks continue to layer additional uncertainty into decision-making.

Small business owners are managing pressure from both sides, as rising input costs compress margins while those same pressures reduce customers' ability to spend.

The result is a constant balancing act that defines what it takes to keep a business on solid footing.

For many businesses, stability is the foundation for the next stage. But growth today looks different than it did in the past.

Rather than scaling headcount or accelerating spending, many owners are taking a more measured approach, prioritizing efficiency and flexibility.

That shows up in steady hiring plans, stable investment levels and a focus on maintaining access to capital rather than expanding it aggressively.

In this environment, growth doesn't always mean getting bigger; it's about working smarter.

Succession planning

For all the focus on growth and resilience throughout a business' lifecycle, one stage of ownership remains underemphasized: Planning for the end.

Much of today's small business decision-making is anchored in the near term (working capital, immediate staffing needs, quarterly look-ahead). Owners are focused on a compressed planning horizon, which is still necessary, but comes at a cost.

When volatility dominates the day-to-day, long-term succession planning tends to slip. That makes sense in the moment. There is always another decision to make, another expense to manage, another short-term target to hit.

Over time, though, pushing that conversation off only raises the stakes. Succession is one of the most important decisions an owner will make, even if it rarely feels urgent.

Owners who plan for succession early tend to run differently. They develop employees and leaders who can step up and take on responsibility within the organization.

They put systems in place that do not depend on a single decision-maker. They think about how the business connects to their personal finances and what an eventual exit might look like.

Those choices shape how the business runs well before any transition is on the horizon. The lifecycle does not just lead to succession. It depends on preparing for it from the start.

The bottom line

As business confidence rises, small business owners are showing they can absorb shocks through unsteady times. There is a steady confidence in where their businesses are headed and what comes next.

Small businesses do not just open, they launch. That moment may get the spotlight, but success is not defined by the lift-off. It is shaped by everything that follows.

Owners must stabilize when conditions change, make disciplined decisions about growth and plan for the long term even when the near term demands their attention.

The strongest businesses are not built around a single moment. They are built over time, through the choices owners make across the full lifecycle — from launch to stability to growth and, ultimately, to what comes next.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

I've worked with enough successful business owners to know that almost every one has the same gap in their plans.

Take a scenario I see all the time: Dave built a widget company from nothing into a $30 million business. He's sharp, disciplined and completely focused on growth.

But when I ask him what his plan looks like after the company's sale, he stares at me like I've asked him to solve a riddle in an unknown language.

Dave isn't unusual. Most successful entrepreneurs pour every ounce of energy into building a business and almost none into planning for what happens when it turns into liquid wealth.

It's not carelessness. Building the company is the priority. If it doesn't succeed, there's nothing for which to plan.

The problem is that by the time the exit is real and there's a signed contract and a closing date, the biggest wealth-building opportunities have already passed. The cost of that timing gap can run well into the millions.

Three things business owners aren't considering

The same three blind spots come up again and again:

• The first is business structure. How the company and the owner's personal stake are organized for tax purposes. Whether you're a C corp, S corp, LLC or LLP affects not just annual income taxes but the tax treatment of any future sale. Get this wrong at formation, and you could be locked in for decades.
• The second is succession planning. For a business to command a strong valuation, it needs to be transferable. This means there is management in place, client relationships are institutional rather than personal, and operations can run without the founder. Buyers pay a premium for businesses they can take over immediately.
• The third is exit and estate planning. This one costs families the most money. A successful sale creates a massive tax event. Without years of advance planning, your options to reduce that burden shrink dramatically.

Why the math gets worse as the business grows

Valuation multiples expand as revenues grow. A company with $200,000 in EBITDA might sell for five times, or $1 million. Scale to $3 million in EBITDA and a 10-times multiple puts the value at $30 million. At $35 million in EBITDA, a 20-times multiple can push it to $700 million.

Industry and revenue quality directly impact these numbers, but the pattern holds: The bigger the exit, the bigger the tax event.

The federal estate tax rate above the exemption is 40%. The current lifetime exemption is $15 million per person ($30 million per couple), which is the most generous in U.S. history.

But Congress can change that number. A sale that pushes your estate above the exemption can trigger an enormous tax bill for your heirs if you haven't planned ahead.

What early planning looks like

If a business owner shows up with a signed purchase agreement and asks what can be done to reduce the tax hit, the honest answer is: Not much. The valuation is set. The structure is locked. The die has been cast, as we say.

The difference between the business owner who plans five years out and the one who plans five months out can easily be eight figures.

Let's revisit Dave's scenario. Five years before his planned exit, we started working on a strategy. Dave created an irrevocable trust for the benefit of his wife and children and transferred 50% of his company, valued at $15 million at the time, into that trust.

When the company sold for $60 million, the trust's half was worth $30 million, and that $30 million was outside Dave's taxable estate.

He paid long-term capital gains of 20% on the sale rather than ordinary income rates of 37%, and by moving assets out of his estate at a much lower valuation years earlier, he avoided what could have been $12 million in estate taxes on the growth alone. All told, early planning saved Dave's family north of $20 million.

Two types of trusts come up most often in these conversations:

• A spousal lifetime access trust (SLAT) is an irrevocable trust that names the spouse as beneficiary during their lifetime, then passes to children and grandchildren. It works well when the business owner might still need access to income or assets from the trust.
• An intentionally defective grantor trust (IDGT) skips the spousal access and goes directly to children and grandchildren.

Both of these options share the same critical advantage: The assets are valued when they go into the trust. For a growing business, that means transferring at a relatively low valuation years before the exit and letting all that appreciation happen outside the taxable estate.

Charitable strategies can strengthen the plan further. Donating appreciated stock to a donor-advised fund — or, for private company shares, to an organization that accepts them — delivers meaningful tax benefits over donating cash. These tools work best when built into the strategy early.

Four things to do now

If you own a business and think you might sell it someday (even if "someday" feels like a decade away) here's where to start.

1. Find the right wealth manager. Look for someone who works specifically with business owners and can help you build a long-term plan that connects your business goals to your personal financial picture. This isn't a one-meeting exercise, it's an ongoing relationship.

2. Assemble your full team and get them on the same page. Alongside your wealth adviser, you also need an attorney and an accountant, all working from the same playbook. These professionals shouldn't be operating in silos. The value comes from coordination. To ensure this, I encourage you to ask your team four questions:

• What is the plan?
• How are we going to get there?
• Who else needs to be involved?
• What are we not thinking about? This is the one most people forget.

3. Start three to five years before any potential sale. This is the window when the most powerful strategies, including trust planning, ownership restructuring, estate tax reduction, are still available to you. If you wait until a deal is on the table, most of those doors close.

4. Execute aggressively. An unexecuted plan is worthless. Once the strategy is in place, move on it. Every year of delay is a year that asset values grow inside your taxable estate instead of outside it.

The future will arrive faster than you think. Time is your single greatest ally in wealth planning but only if you use it.

The entrepreneurs who start early, build the right team and execute with urgency are the ones who keep the wealth they spent a career creating.

The ones who wait? They pay for it.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To help you understand what is going on in the global economy and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest...

After a first half defined by the Iran war and its impact on oil, commodity prices and inflation, the rest of 2026 will test the global economy, even as AI-driven optimism continues to lift growth. With the Persian Gulf’s energy exports still hobbled, the second half will be far from dull for global markets.

The pace of global growth will slow down, cooling to roughly 2.8% in 2026. Volatility will continue as inflation pressures spread from energy outward into metals, fertilizers, and industrial inputs, pushing the global inflation rate up to about 4.5%. Here is what to expect in key countries.

The U.S. economy will remain resilient, insulated from the worst of the oil price shock by its domestic oil and gas production. Continued AI, national defense, and energy spending will serve to prop up business investment, keeping GDP growth around 2.1%.
But consumers are feeling the strain, as the personal savings rate continues to dwindle, inflation persists and long-term unemployment rises. A spending pullback seems inevitable at some point.

Europe’s macroeconomic outlook is shifting toward stagflation. Expect eurozone growth of just 0.8%, as the energy shock hits an economy lacking fiscal buffers. Germany will struggle to grow more than 0.7% as surging energy costs weigh heavily on its industrial sector.

The U.K. economy is shifting to a lower gear, with growth slowing to 0.9% as inflation squeezes incomes.

India will be a star performer in Asia, though growth will moderate to 6.5%.

China will continue to decelerate, slowing to 4.5% as the property sector remains a drag, though surging green-tech and AI-related exports offer a bright spot.

Japan faces a delicate balancing act, as it battles a weak yen and inflation imported from abroad while supporting a fragile economy expected to grow just 0.4%.

Growth in Latin America will face headwinds from weaker Chinese demand for the region’s commodity exports, tighter U.S. lending terms and rising fuel costs.

Interest rates won’t likely fall as much as investors were hoping this year. Central banks are caught between rising inflation rates and a softening labor market. The Federal Reserve is on hold for now, with rate cut expectations having evaporated, while the European Central Bank is moving toward an isolated June rate hike.

Finally, keep an eye on U.S. private credit lenders. Stresses are emerging, particularly in software loans. A systemic financial crisis is unlikely, since lenders in the industry aren’t as critical to the financial system as the biggest banks were during the mortgage crisis of 2008. For private credit, the losses will be a slow burn for investors. That could dampen the ebullient mood on Wall Street later this year.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Growth can become a numbers game fast. More campaigns, more touches, more spend. But one adviser we work with sees it differently: Your firm can grow when you're known by your community rather than just your clients.

That's the tension many firms face. You want to scale, but you don't want to lose the human side of the business in the process. The answer for this firm was simple and disciplined. Community service was made part of the team and the job.

The result is worth your attention. It became a big part of the firm's culture, client experience and growth.

One simple rule

The adviser and their leadership set a clear expectation: Every employee would spend four hours each quarter volunteering.

That kind of rule can sound small on paper. In practice, it does something bigger. It tells your team more about what matters on the annual calendar.

We've had a similar volunteer structure at our company for more than a decade, and employees often say these days are among their favorite of the year.

For the adviser, the reasoning for the rule was also rooted in a real client need. Many retired clients, once they leave long careers, lose more than a paycheck. They can lose routine, identity and community. The firm wanted to help bridge that gap by creating opportunities for connection through local service.

That decision gave the team a stronger sense of purpose. It also gave clients a clearer picture of what the company stood for.

Here's the key turning point: This firm didn't treat community work as branding language. It was treated as behavior.

Building bridges

As a financial adviser, you're in a trust business. People don't always choose your firm only because of the process or product. They also choose you because they believe you understand their lives and will show up when it counts. Community involvement reinforces that in a very public, very human way.

At this firm, volunteer events created three kinds of value at once:

• Stronger team connection. Employees served and interacted with colleagues across departments
• Deeper client ties. Clients enjoyed shared experiences with the team outside the office
• Clearer market identity. The firm became known for doing what it said it valued

That last point matters. Plenty of firms talk about care, service and purpose. Fewer build systems that make those values visible every quarter. It's a lot like fitness. Good intentions don't change much. Consistency changes things.

Each year, clients of this firm help choose a "charity of the year," giving them an ongoing voice in the firm's outreach and creating real buy-in from the start.

Employees also volunteer during normal work hours, which removes friction and signals that the commitment is real.

The team then works with local nonprofits to create meaningful events. Before each event, the nonprofit contact comes to the office and presents to the team. They give employees context about the mission, the local chapter and how the organization serves the community.

Why does that step matter? Because people engage more deeply when they know the "why" behind the work. They aren't just filling boxes or walking a route. They understand the people and purpose behind the effort.

That's when service begins to move from task to mission.

Metrics with meaning

If you're serious about making community engagement part of your business, you need to measure what matters.

Currently, this firm tracks volunteer hours to confirm participation. That's a good start. But the team understands something important: Hours are the input, not the outcome.

The firm houses program data in a custom-built dashboard. The dashboard gives the team one place to track volunteer hours, promote upcoming service opportunities and reinforce core values.

It also includes practical resources such as team spotlights, a quarterly newsletter, marketing themes and training documents.

That kind of central hub does two useful things.

First, it keeps the service visible. If your values live only in a presentation deck, they fade. If they live in the same place, your team checks for events, updates and resources as part of their daily work.

Second, it creates accountability. When outreach has a home inside your systems, it becomes easier to plan, measure and improve.

For advisers and their firms, this is the larger lesson: Culture scales better when you give it structure. If you want your team to act on a value, put it somewhere they can see, use and track.

Five steps to build a community outreach program

If you want to create something similar in your own firm, start here:

1. Define your values. If your team can't explain why your firm serves, the program will feel shallow. Start with a clear set of core values and make sure your outreach reflects them.

2. Invite client input. Ask clients which causes matter to them. This makes the program more personal and helps your outreach reflect the community you already serve.

3. Set a realistic commitment. Four hours each quarter worked for this firm because it was specific and manageable. Choose a standard your team can meet without turning it into a burden.

4. Partner locally. Look for organizations in your area that align with your firm's values and your clients' interests. Over the years, our company has partnered with dozens of local groups of many sizes, and we're always finding new ways to connect and create impact.

5. Track your impact. Start with hours if that's the easiest place to begin. But don't stop there. Over time, measure participation, client engagement, team sentiment and referral activity.

Showing up is the strategy

Advisory firms often seek growth through new tools, campaigns and channels. Those can help. But this one example is a reminder that growth also comes from being known, trusted and present in the places that matter to your clients and your team.

When your firm shows up consistently, people notice. They remember. They talk. That's not a shortcut. It's a principle you can build on.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

A young investor today wakes up to a TikTok video on private credit, asks a generative AI tool to draft a retirement plan over breakfast, scrolls through podcasts comparing crypto custodians on the commute and fields a robo-adviser's portfolio recommendation before lunch.

Information about money has never been cheaper to produce, easier to access or harder to evaluate. However, despite the ubiquity of investment information, human advisers remain the single most trusted source of guidance for young investors today.

The role of traditional investment advice in an age of digital communication is a central tension in the new Next-Gen Investors report from CFA Institute, which draws from a survey of more than 2,400 mass-affluent and high-net-worth investors in six major wealth markets around the world.

Instead of reading this as nostalgia for a fading model, consider how trust works in a saturated information environment. When advice is everywhere, the question is no longer who has the answer, but who can be trusted to guide choices among many possible answers.

Younger clients are looking for a curator and collaborator, and the advisers who recognize that will own the next generation of relationships.

How advisers can stay relevant

What makes young investors different is how they verify trust. Older investors tended to define trustworthiness primarily through the relationship itself, with years of personal history, in-person meetings, and continuity across family generations. Gen Z and Millennial investors still want that personability, but they expect it alongside measurable, professional indicators.

Our research shows young investors place greater weight on professional credentials, transparency around conflicts of interest, data security and verifiable performance against benchmarks.

These markers are particularly valuable in a world ripe with mass-produced AI advice. Professional credentials, for example, are one of the few public proofs that a person, not a machine, has demonstrated domain knowledge and expertise.

This measurable trust is what advisers can lean into to stay relevant. In our survey, approximately one third of Gen Z and Millennials already use generative AI to learn about investing. Generative tools will keep getting better at producing fluent-sounding advice, but fluency is not judgment.

Cut through the hype

Seasoned advisers bring years of seeing market cycles, regulatory changes, behavioral patterns and the outcomes of decisions that looked obvious at the time. That experience is exactly what cuts through hype. An AI tool may produce responses that sound confident, but it cannot replace competence.

For advisers, this reframes the scope of their work. Professionals are no longer the primary gatekeeper for investing. Clients now have access to an abundance of information. Instead, the job is to serve as a curator, validator and translator of an overwhelming digital landscape.

In some ways, that is a more demanding role, yet a more durable one. It means being fluent in the latest products your clients are reading about, including the ones you would not personally recommend, so you can have an informed conversation rather than a defensive one, and being ready to interpret a viral video or an output a client copied out of a chatbot.

Younger clients are not going to stop consuming content, but they want an expert whose true value lies in human judgment.

Communicating that value is now part of the job. Younger clients will not assume seasoned judgment is in the room but will look for evidence of it.

Treat credentials, professional experience and past performance as strategic assets that are clearly communicated to current and future clients.

Document conflict-of-interest policies in plain language and make them client-readable.

Show the work behind a recommendation, including supporting evidence, not just the conclusion.

At the same time, AI can be a useful tool to communicate the value proposition of adviser judgement. Used well, it removes the friction that prevents advisers from being successful curators and collaborators.

AI can help with drafting first-pass communications, summarizing trends, preparing for meetings and scaling personalized check-ins.

Nearly 70% of Gen Z and Millennial investors in our study who use a paid financial professional interact with their adviser at least monthly. That cadence is difficult to sustain without technology, but underlying those interactions is the adviser's expertise and judgment orchestrating those communications.

Voice of reason

But the deeper reason younger clients want a human adviser is that the world has become a noisy place, and navigating the signals and products can be overwhelming and lead to rash decision-making.

Over half of Gen Z and Millennial investors in our research have already made at least one investment driven purely by fear of missing out (FOMO), most often in cryptocurrency.

As markets continue to show volatility, and as new investment opportunities emerge, the adviser's role is to be the person on the other end of the line when the next market dip arrives, the next can't-miss asset surfaces, or the noise of information gets too loud.

The point is not to chase every trend or reflexively dismiss new products or opportunities, but to be a voice of reason and stability. A credentialed, experienced professional who can keep clients aligned to their long-term goals and strategies; steadfastness becomes even more valuable in a noisy environment.

The advisers and firms who successfully adapt to the next generation will not approach AI as a threat, nor as a replacement for the adviser-client relationship.

They will be the ones who use technology to amplify their reach, and focus on their human qualities of judgment, accountability, ethical stewardship and demonstrated experience, which no algorithm can fully capture.

Genevieve Hayman, PhD, and Ryan Munson are co-authors of the CFA Institute Research and Policy Center report Next-Gen Investors: A Guide for Wealth Managers and Financial Advisers.

Genevieve Hayman is a senior manager of macrosystems and foresight at CFA Institute. Her research focuses on pensions and retirement security, complex systems, cognitive science and the long-term forces shaping global finance. In her role, she develops structured, long-horizon scenario frameworks that examine how technological, economic and regulatory shifts may reshape financial markets, institutional behavior and professional norms. She also contributes to early-warning frameworks and cross-pillar integration across CFA Institute's research agenda.

Ryan Munson is a research manager at CFA Institute. His research focuses on pensions and the future of finance, exploring how extra-financial factors impact the investment industry and investment professionals. Ryan serves on the advisory board for the Mercer CFA Institute Global Pension Index. He is the author of several CFA Institute publications, including the Future State of the Investment Industry, the Future of Work in Investment Management series and the CFA Institute Investor Trust series.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Research shows that most high-net-worth (HNW) clients are already charitable. They donate to causes they care about, support organizations in their communities and often want philanthropy to play a meaningful role in their legacy.

Yet many lack a cohesive giving strategy that ties charitable giving to clearly defined objectives and integrates within their broader financial and estate plans. Bridging the gap between intention and strategy is where advisers can provide real, differentiated value.

Recent data highlights how much HNW clients really value these discussions. According to the 2026 TPI Study of The Philanthropic Conversation, 88% of HNW clients consider it important to discuss philanthropy with their advisers, and 80% believe advisers have a professional or ethical responsibility to raise the subject.

Advisers have largely caught up to that expectation: 96% now view it as their obligation, a significant increase from 62% in 2018. The alignment is there, but the next step is ensuring these discussions move from one-off, year-end conversations into a consistent bullet point on the planning agenda.

1. Understand what motivates clients to give

Before diving into giving vehicles and technical solutions, the first step in helping clients build a strategic giving plan is understanding why they are motivated to give in the first place.

Advisers often assume clients' philanthropy is driven primarily by tax considerations, but the data suggests clients are most motivated by purpose and impact rather than deductions.

The TPI study found a notable disconnect between adviser perceptions and client priorities. Advisers identified "being an inspiration to others" as the top motivation for charitable giving, while clients ranked "making an impact" highest.

Furthermore, 40% of advisers cited taxes as a key motivator, compared to only 21% of clients.

For advisers, philanthropy offers a unique opportunity to connect with clients on a deeper level beyond portfolio performance and investment returns.

Asking targeted questions around charitable goals often reveals what clients care about most, and uncovers personal aspirations, legacy goals and family dynamics that may not come up during traditional financial planning meetings.

When clients feel understood on that level, the adviser relationship becomes more meaningful and durable.

2. Match giving vehicles to goals

Once a client's motivations and priorities are clear, the next step is helping them select the charitable giving vehicles and strategies that best support their goals.

According to the TPI study, 34% of clients are interested in integrating charitable objectives into their broader wealth management plans, reflecting a growing desire for philanthropy to be intentional rather than reactive.

Different charitable vehicles serve different purposes, and the right approach depends on the client's goals, assets and desired level of involvement.

• Donor-advised funds (DAFs) suit clients who want flexibility, simplicity and an immediate tax deduction without the administrative obligations of a foundation.
• Private foundations make sense for clients seeking more control, a vehicle for multigenerational family engagement, and the ability to make grants, run programs or invest mission-aligned capital.
• Planned giving programs, including charitable trusts and bequests, work well for clients integrating philanthropy with estate and legacy planning.

It often makes sense for donors to use a combination of giving vehicles. Private foundations and DAFs are especially synergistic, providing more ways to give and maximizing financial outcomes.

Overall, moving from ad hoc donations to a more programmatic approach through structured vehicles makes it easier to incorporate philanthropy into a financial plan and enables steadier streams of funding for nonprofits.

3. Measure progress and impact

As philanthropy becomes more intentional, many donors want greater clarity on the impact of their charitable giving, but measuring that can be difficult.

According to the 2026 Foundation Source Donor Survey, 27% of donors identify impact measurement as a top challenge, while 33% say it is an area of strong interest.

Advisers can play an important role by helping clients define what success looks like from the outset. For some, success may mean donating a certain dollar amount annually or supporting a specific number of organizations.

For others, it may involve measurable outcomes tied to a specific cause, such as scholarships funded, families served or conservation goals achieved.

Strong relationships between donors and grantees can make a meaningful difference, too. Donors who engage regularly with the organizations they support often have a clearer view of how their grants are being deployed and the impact they have.

Encourage clients to maintain an ongoing dialogue with grantees — an open line of communication can foster a more collaborative environment and lead to more insight into results.

Just as importantly, charitable planning discussions should not happen only once a year. Embedding philanthropy into regular planning meetings allows advisers and clients to revisit goals throughout the year and better track progress.

Donors are becoming more deliberate about how they give and want it to feel purposeful, not piecemeal. Advisers have the opportunity to help clients structure their giving strategically to reflect personal values, involve the next generation, and sustain across market cycles and policy changes.

When you help a client turn charitable intentions into a structured giving strategy, you're not only serving their charitable mission, but also building the kind of relationship that lasts for generations.

The 2026 TPI Study of the Philanthropic Conversation was conducted between December 2025 to January 2026 among 300 professional advisors who advise high-net-worth (HNW) clients (those with $5 million or more in investable assets) and 103 HNW clients who participate in philanthropy. The study was co-sponsored by Foundation Source and DAFgiving360, with support from The Boston Foundation.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

It's not unusual to feel a flood of relief as soon as tax season subsides, especially if you're a business owner.

After weeks spent pulling documents, reviewing expenses, answering CPA questions and finding cash for a final payment, you'll probably feel like closing the folder immediately and not thinking about taxes for another year.

But that pause can be expensive.

Q2 is one of the few points in the year when the return is recent enough to teach you something, and the calendar still gives you time to align. The IRS expects taxes to be paid as income is earned, not just when a return is filed.

For many business owners, that means staying current through withholding or estimated payments.

For individuals, sole proprietors, partners and S corporation shareholders, it's when you generally need to make estimated payments if you expect to owe at least $1,000 at filing.

What often gets called tax planning is, in practice, more like tax reporting in advance. Now is the time to make sure you don't fall into that trap.

Model the tax impact before major decisions

Most large tax outcomes begin when a business owner hires, buys, sells, restructures, takes on a partner or changes how income flows through the company.

A decision can look profitable in the operating model and still create a tax position that weakens the economics.

For instance, a new senior hire may bring growth, but the full cost includes payroll taxes and mandated government benefits, which will definitely bring changes to cash flow.

Similarly, a major equipment purchase may qualify for depreciation benefits, so timing and income level matter.

Q2 gives owners time to run those numbers before the decision is locked. As a CPA, I'd recommend leveraging that time because fixing tax problems later can be slow and costly.

For context, during fiscal 2025, the IRS processed about 1.6 million business amended returns and took an average of more than 13 months to process them.

It's always best to involve a tax adviser before making any move. Ask your CPA to show the after-tax effect of the decision, or the estimated cash needed to support it, or anything that would affect the result, such as deadlines.

The goal is not to nitpick every small purchase or watch every action round the clock. It is to identify which decisions can materially change taxable income, deductions, credits, entity treatment or estimated payments before you commit.

Use last year's bill as a diagnostic for this year

A higher tax bill can feel like you're finally growing your business. And in some cases, it is. When revenue rises, the owner's income often rises with it, and so do taxes.

But that bigger payment is not always just a sign of success. It can point to a structure that no longer fits, or planning that may have started too late.

Q2 is the right time to review what drove those numbers while the return is still fresh.

• Look at the categories that changed most from the prior year
• Review whether revenue growth reduced deductions or moved income into a higher tax bracket
• Confirm whether personal and business expenses were clearly separated

Small-business tax surprises often stem from one or more of these.

The purpose of this review is to spot the opportunities you missed so you can course correct quickly and get ahead of any patterns that are likely to repeat this year.

• If revenue grew, is it likely to grow again, and what bracket will that put you in?
• If a deduction was missed, what needs to change in the books before December?
• Does your entity structure still serve you?

These are the questions you should be asking now.

For high-earning business owners, key opportunities may involve retirement plan design, cost segregation for real estate, R&D credits, Qualified Small Business Stock (QSBS) treatment, entity optimization or charitable giving with appreciated assets.

At Gelt, we can never emphasize enough that these strategies require proactive planning rather than a return-preparation mindset.

In a nutshell, check whether the bill increased because the business performed better, or because the tax plan failed to keep up with the business. Those are two very different problems.

Decide whether your CPA relationship has kept pace

Early-stage business owners often just need a CPA to file for them with accuracy and keep them compliant. But as income grows, that level of support may no longer be enough.

Compliance looks backward at what has already happened. Strategy looks forward at the decisions that can still be changed. If the only conversations with your CPA are happening in March or April, the relationship may be limited to just reporting the year instead of shaping it.

Sadly, that gap is common. In fact, reports say 90% of business clients are interested in advisory or consulting services from their accountant, but more than half say they are not fully using their adviser's full range of services.

This is another reason why Q2 is a practical time to assess the relationship, because both sides have more room to think. Ask whether your CPA specializes in clients with your income type, entity structure, industry and long-term goals.

Think about whether they meet with you quarterly, explain your effective tax rate, flag deadlines in advance and help model major financial events before they happen.

Ensure their scope of work is clear, so you know what is included and what is not.

Make Q2 the start of next tax season

The tax return you filed in April should become the first milestone for the rest of the year. If the bill was higher than expected, Q2 is the time to understand what happened and what the rest of your year might look like.

Look at the income that changed, the deductions that were missed, the estimated payments that fell short, and the business decisions that created tax consequences no one modeled in advance. That review gives you a wider view for the next eight months.

From there, update your income projection, adjust estimated payments before the next deadline, review whether your entity structure still fits your revenue and bring your CPA into decisions such as hiring, equipment purchases, real estate transactions, partner changes or compensation planning before they are finalized.

Waiting until Q4 leaves less room to act. Q2 gives business owners the time to correct what caused last year's bill and make tax planning part of the decisions that shape this year's growth.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

I recently listed my home for sale. Like most people, I spent the weeks leading up to the first showing making it look its best.

I repainted walls, handled the landscaping and finally addressed the small repairs and deferred maintenance I had lived with, and ignored, for years.

Ironically, the house looked better for the strangers walking through it than it did for the family that had called it home.

It struck me how often financial advisers do the same thing with their own firms.

We spend our careers helping clients optimize balance sheets, manage complex risks and think strategically about wealth.

Yet, when it comes to our own businesses, often among the largest personal assets on our balance sheets, many of us delay meaningful investment until a triggering event forces the conversation.

Whether it is retirement, burnout, succession planning or an unexpected shift in the market, many advisory firm owners start improving the business only when a potential buyer or partner comes knocking.

By then, they are not building. They are reacting. They are trying to capture value that should have been compounding for years.

The $100 million to $1 billion reckoning

The wealth management industry is entering a critical period, especially for firms with $100 million to $1 billion in assets under management (AUM). In this range, many firms encounter a ceiling of complexity.

The reliance on the founder's calendar, combined with the manual workarounds that helped a firm reach $250 million, often becomes the very thing that prevents it from reaching $1 billion.

A similar trend is playing out in the legal industry. For years, smaller law firms felt they could not compete with the resources of Big Law.

More recently, however, many have leaned into technology-enabled operating models, strategic partnerships and outsourced infrastructure to level the playing field.

The lesson for wealth management is clear: Scale is no longer just about headcount. It is about whether the firm's technology, workflows and operating infrastructure can act as a force multiplier.

The small-firm edge: Agility as a competitive advantage

There is a powerful advantage hidden in the $100 million to $1 billion space: The ability to pivot quickly.

Large, multi-billion-dollar firms often move slowly because of bureaucracy, legacy systems and multiple layers of approval. Smaller, nimbler firms can often pilot new technology, refine client experiences and adjust operating models in weeks, while larger competitors may take far longer to reach consensus.

By leaning into institutional-grade tools now, smaller firms do not merely catch up to larger competitors. They can out-innovate them by being more responsive, more focused and more willing to evolve.

The valuation gap between a founder-centric lifestyle practice and a scalable enterprise is widening. Strategic buyers and private capital are not simply looking for a list of client names. They are looking for a repeatable, durable business development process. They want a firm that can thrive even if the founder is not personally driving every interaction.

Advisers routinely counsel clients against concentration risk, yet many remain personally over-concentrated in a single fragile asset: A firm that cannot function without their constant, direct involvement.

Institutionalizing excellence

At Aspire, we believe high-level financial management should not be reserved only for the ultra-wealthy. Our mission is to help clients professionalize their financial lives by bringing them the best practices, sophisticated reporting and rigorous oversight often associated with institutional family offices.

To provide that caliber of service, we must first apply those same institutional standards to our own firms.

Michael Kitces and other industry observers have written extensively about the risks of founder dependency as advisory firms scale. The core idea is simple: A firm cannot scale sustainably if its growth, client experience and operating discipline depend entirely on the founder's personal heroics.

Based on the workflows that drive enterprise value, there are three areas where firms can build immediate equity by moving from a lifestyle mindset to an institutional one.

Standardize workflows. Client meetings may follow a general cadence, but there is wide variation across firms in the time required to prepare for meetings and complete follow-up afterward.

Acquirers want to see CRM-driven workflows where agendas, notes, tasks and next steps are documented and repeatable.

If the client experience is a process rather than a set of to-dos stored in the founder's head, risk goes down and valuation goes up.

Centralize planning. Advisers often get bogged down in the mechanics of financial planning: Tweaking projections, generating reports and managing the operational details behind each plan.

Transitioning to a dedicated core team of part-time or full-time specialists helps ensure that the firm's planning engine runs consistently across all clients. It demonstrates that the firm has a methodology, not just a lead adviser's intuition.

Integrate technology. Manual processes are a silent killer of firm value. If teams are still reconciling data between the CRM, custodian, client portal and financial planning platforms, they are increasing the margin for error.

Strategic buyers look for clean, automated data flows. This is not just a technology upgrade. It is a risk mitigation strategy.

Scale, partnership and controlling our destiny

Unlike a home sale, a firm does not always have to be an all-or-nothing transaction.

There is a common misconception that advisory firm owners have only two choices: Remain completely independent until they no longer work or sell the firm and walk away. The most strategic options often exist in the middle.

By investing in infrastructure now, firm owners can create the possibility of partial liquidity. That may allow them to take some capital off the table and diversify their personal net worth while still maintaining meaningful ownership, leadership and client relationships.

Clients today are looking for more than portfolio returns. They are looking for continuity. They want to know whether the firm serving them today will also be there for their children and grandchildren.

The best time to improve the curb appeal of our firms is long before the open house. If we invest in the foundation today, we are not just preparing for an eventual sale. We are building a much better business to own.

My interest in this topic stems from a desire to partner with like-minded firms that share this vision. I believe firms in the $100 million to $1 billion space are often better off operating together than apart.

Together, we can scale faster, share the burden of operational complexity, and capture value that is often unavailable to a solo practice.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

It's no secret that many RIAs are looking to modernize their technology stacks and create a more personalized, digital experience for clients.

Based on my experience, the most successful RIAs that are achieving top-decile organic growth and strong client outcomes tend to share one strategy in common: They are segmenting their business.

Segmentation is the process of dividing an adviser's client base into distinct groups based on needs, behaviors, profitability, growth potential, complexity and other characteristics.

With the right structure, advisers can match different clients with the service models, pricing, custodial setups and technology solutions that best suit them.

The result is a streamlined practice structure where larger client relationships still receive the depth of service they need, while smaller accounts can be serviced effectively without draining adviser capacity.

However, when I mention "client segmentation" to RIAs looking to scale, the initial reaction is often skeptical. Many associate it with added overhead, operational risk and more complex workflows.

Without the right preparation, partners and technology, client segmentation can indeed slow advisers down and cause the very friction it is designed to remove.

The good news is that RIAs can take clear, proactive steps before committing to segmentation to ensure it aligns with their broader strategy and timing. With the right partner, advisers can:

Determine if segmentation is right for the practice

Based on their current assets under management (AUM), as well as their appetite for risk, ability to weather potential temporary disruption and goals for growth, advisers can figure out whether their practices are at the right point in their development to implement client segmentation.

This strategy tends to work well for firms that have accumulated more than $250 million in AUM and are outgrowing their initial niche specialization. There will also be some degree of short-term disruption for any firm that adopts this strategy, since segmentation can sometimes involve parting ways with clients who no longer fit the practice.

Run profitability analysis

Using visualization tools, advisers can model the financial impact of client segmentation on their existing books, as well as calculate the cost-to-serve ratio across all segments.

These tools can also calculate what minimum fees would be necessary, following the implementation of client segmentation, to ensure their practices can remain independent and profitable.

Design tier structures

Advisers can work with partners to figure out how many segments need to be created based on their current books and then which service levels and other factors should be assigned to each segment. They can also plan for how to balance meaningful upside with any potential disruption.

Build operational infrastructure

To ensure their technology can support client segmentation, RIAs can prepare their billing solutions for tiered pricing, utilize analytics tools to make lower-tier segments more profitable and configure their CRM systems to track different segments.

Roll out sequentially and manage client communication

When solutions enabling client segmentation have been onboarded, RIAs can roll out the new service models beginning with the top strategic accounts and then continue down the line to lower-margin and at-risk clients.

Advisers and their partners should also deliver personalized messages about any changes — from fee increases to new adviser assignments — to individual clients in a timely manner.

Track progress

To monitor if client segmentation is helping meet desired goals, RIA firms can establish baseline metrics for what success should look like at 90 days, six months and 12 months after implementation.

Outstanding service works best with guardrails. When RIAs attempt to serve all clients the same way, they often end up serving no one exceptionally.

A one-size-fits-all approach doesn't make sense if you're working with a $500,000 Millennial couple and a $20 million executive nearing retirement who have different strategies, financial planning needs and specializations.

Client segmentation gives RIAs the freedom to define investment strategy, adviser involvement, planning depth, pricing and more for every client — and excel at serving them accordingly.

Over time, this strategy can deliver positive outcomes, high-quality engagement and a competitive advantage.

With the right team and technology in place to mitigate friction, RIAs can unlock the full value of client segmentation and serve the next generation of clients while delivering sustainable growth for years to come.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

When the boss of a company with a $4 trillion market value steps down, investors tend to sit up and take notice. That's why Apple (AAPL) shares dipped temporarily when the firm announced in April that after 15 years, chief executive Tim Cook was moving to a new role in September. His replacement, John Ternus, is a 25-year Apple veteran who now leads the company's hardware engineering division.

Ternus has big shoes to fill. Under Cook, Apple quadrupled its sales, its stock climbed more than a cumulative 2,300%, and its market value increased 10-fold. Cook presided over two product launches — the Apple Watch and AirPods — that now each pull in $10 billion in sales a year. And he successfully negotiated with Trump for tariff exemptions for Apple products.

His signature accomplishment, however, was operational: He streamlined the company's global supply chain, creating a geographically diverse production system across Asia that drastically reduced the time Apple holds its parts in inventory, among other things.

Still, there's much to commend the new guy. For starters, Ternus, a near-lifer at the firm, has played a role in the development of nearly every major Apple product over the past two decades. Analyst Mark Newman, of investment firm Bernstein, says Ternus “has owned the product slate most investors care about — iPhone, iPad and AirPods.”

Apple's board said Ternus's appointment followed a “thoughtful” planning process. It tapped him over better-known senior managers, who arguably were more on display (they made more appearances at the company's events). But they are all in their early sixties, only a bit younger than the 65-year-old Cook.

At 51, Ternus's relative youth stands out. Word is he's a well-respected, well-liked executive with a steady management style akin to his predecessor. He's also all-in on Apple's secretive culture. On a recent call with analysts, he said, “We have an incredible road map ahead. And you're not going to get me to talk about the details of that road map.”

Apple's AI challenge

Ternus earned his bona fides in hardware, but his biggest test will be a software challenge: Artificial intelligence.

Apple has so far opted out of being a hyperscaler like Meta (META), Microsoft (MSFT) and Google (GOOG), all of which are spending hundreds of billions a year to build up their AI capability. Instead, the company has partnered with Google to power its AI solutions. That has enabled Apple to safeguard its hefty cash flow and to continue buying back its stock aggressively.

But critics say Apple has failed to deliver on a number of promised enhancements to Siri, the built-in AI feature in its devices. And that has made Apple's AI plan unpopular with some investors. “Apple Intelligence is a country mile from the ‘wow' experience that was promised,” says Matt Britzman, an analyst with the U.K.-based investment firm Hargreaves Lansdown. Laura Martin, an analyst with investment firm Needham, is no fan either. The company's “lagging AI integrations appear tone-deaf and could have existential risks,” she says.

That said, Ternus could be just what the company needs right now. “We expect him to execute new ideas faster, take on more risk, and drive higher internal accountability,” Martin adds.

A CEO switch can be perilous for a company's stock, particularly if the outgoing chief has been a big success. But Oxford University's Said Business School found that if a new CEO presents their strategy in their first 100 days, company shares tend to move up, albeit by a slim average of 5.3%.

We, along with the estimated millions of Apple shareholders, will be watching.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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Pursuing a Golden Visa is one way to secure a different lifestyle — now or later.

It provides a vehicle for visa-free travel and the opportunity to take up residency in another country, which can be extremely attractive in geopolitically uncertain times.

Many people are attracted to the idea of moving to a country where the weather's better, the pace of life is slower, and healthcare might be cheaper and easier to access.

For high-net-worth individuals (HNWIs), there's also the lure of lower taxes to help protect investments.

An effective hedge against instability

One compelling reason for seeking a Golden Visa is its effectiveness as an emergency backup plan. When viewed from a risk-management perspective, a Golden Visa can be an effective hedge against a range of potentially damaging issues that could cause significant business disruption, as well as impacting individual freedoms, wealth and personal security.

Political instability generates risk and creates volatility in what were formally relatively stable marketplaces and can seriously undermine the financial plans of even the smartest investors.

Changes in government might lead to sudden tax or regulatory adjustments that could devalue long-term investments. The introduction of capital control policies, including tariffs and restrictions on transferring money in and out of the domestic economy, can constrain liquidity, significantly limit investment opportunities and increase the cost of doing international business.

The key to an effective escape route

There's a personal risk too, if rising civil unrest threatens societal and personal stability. In such an environment, it might be prudent to have a plan B that can quickly be put into action if leaving the country becomes imperative.

While this might sound like a doomsday scenario, if it happens, a Golden Visa can provide the key to an effective escape route.

Recent events in the Middle East are a prime example of how global events can affect economies and individuals, with the ongoing conflict causing high inflation, stock market instability and eroding investment value at pace.

Individuals, their families and their assets have the option to legally reside in another country if they possess a Golden Visa. Although they're not usually obliged to relocate once a visa has been secured, having one ensures they have options should the situation take a turn for the worse in their home country.

It provides a second base for individuals and their families to relocate quickly if needed, divert investments if economic uncertainty makes things difficult at home and continue to operate a business internationally if required.

Protection against circumstances beyond your control

A Golden Visa is about enhancing financial resilience and strengthening personal sovereignty.

As a citizen of a single country, individuals are subject to a single set of laws, one passport, one tax authority and the potentially negative impacts of an evolving political climate.

Dual citizenship enables individuals to protect themselves against circumstances beyond their control and gain the peace of mind that if things decline rapidly in their home country, they have a way out.

Of course, it's impossible to get house insurance if the house is already on fire. Those seeking a Golden Visa are advised to start planning early. Waiting for a crisis to hit is inadvisable. It's much easier and cheaper to investigate a Golden Visa while things are relatively stable.

Asset protection in an uncertain world

A Golden Visa doesn't immediately confer citizenship on the holder, but it will usually offer a path to citizenship once any requirements have been met (depending on the country offering it).

Applicants might be required to spend time in their designated country — with requirements typically ranging from one week to six months per year for a predetermined length of time, depending on the location — and will have to demonstrate ties with the host country, either through inward investment, such as real estate, or through passing a basic language test.

It's important to acknowledge that Golden Visa holders aren't abandoning their country of birth in search of a better lifestyle. They're simply seeking to protect their assets, families and businesses in an ever changing, increasingly uncertain world — or, to put it another way, they're managing risk more effectively.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To help you understand what's going on in the economy, domestic and global, our highly experienced Kiplinger Letter team keeps you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

The Persian Gulf will eventually reopen to shipping and allow the region’s vast energy exports to resume flowing. But the world energy market will never be the same after months of severe disruptions from the war and blockade.

Oil and gas

Security of oil and gas supplies will assume much greater importance for both producers and consumers. By some measures, the loss of exports from the Persian Gulf has been the largest disruption to energy supplies in history. The economies that rely most on Middle Eastern energy, especially those in Asia, will be looking to diversify their supply options. Meanwhile, the oil and gas exporters that line the Persian Gulf will be working on alternate ways to get shipments out. No one is going to want to risk another closure of the narrow Strait of Hormuz, the passageway for a fifth of the world’s oil and vast supplies of gas before the war.

The war has shown a need for greater reserves of oil and refined fuels in parts of the world that depend heavily on imports. At the beginning of the conflict, China had a massive 1.4 billion barrels of strategic reserves, but many other Asian countries lacked much of a buffer when Middle Eastern barrels stopped arriving. Going forward, expect a race to refill existing storage with crude oil, jet fuel and other products, and then to add additional storage tanks, to guard against future supply disruptions.

The oil-rich U.S. will need to be part of this trend of boosting stockpiles. The Strategic Petroleum Reserve has played a key role in making up for lost output, but it was already heavily depleted in 2022, when Russia invaded Ukraine. Now, it has only about half its long-term storage level, and needs to be refilled eventually.

In the Middle East, expect a scramble to build new pipelines as alternatives to shipping via the Gulf, which Iran showed it can shut down. Saudi Arabia’s pipeline to its west coast proved a vital lifeline for energy markets during the war. The UAE (United Arab Emirates) is rushing to build another pipeline that bypasses Hormuz, which it plans to finish in 2027. Iraq will likely try to hike pipeline exports via Turkey. Meanwhile, the region faces a hefty repair bill for its existing energy infrastructure, more than $50 billion, per one industry estimate. When the war is truly at an end, the Persian Gulf region will see an explosion in energy-related repair and construction.

For oil-producing nations elsewhere, the war spells potential new exports. Places that can boost supply and face lower geopolitical risk stand to be rewarded. Among them:

• Canada, whose hefty output was already gradually rising
• Argentina
• Brazil
• Guyana
• Venezuela, home to the largest oil reserves in the world by many estimates.

Venezuela's industry needs major investment after decades of mismanagement by its socialist government. But already, exports to the U.S. are up in the wake of the capture of former President Nicolás Maduro. The only American firm operating there now is Chevron. But others may cautiously join it in the coming years.

Note the geographical shift here: More oil output in the Western Hemisphere, far from the war-torn Persian Gulf. The U.S. will remain the world’s top oil producer, though it is unlikely to grow much more as our most productive oil fields mature and investors press energy firms to keep drilling costs down. But our huge production and extensive refining sector will anchor the growing energy industry in the Americas.

Natural gas

Lost oil exports have received most of the attention during the Iran war. But don’t overlook natural gas.

Prior to the war, about one-fifth of LNG (liquefied natural gas, superchilled for shipping) came from the Persian Gulf. The conflict halted that trade, and some LNG export facilities are badly damaged.

America, already the largest gas exporter, stands to grow in importance as it builds more LNG export terminals and continues pumping more gas to sell in overseas markets. With Middle East gas supplies in doubt and Russian LNG under sanction from Western governments, U.S. gas will be in even higher demand. While America’s oil production shows signs of flattening, gas output is growing. Nine LNG export facilities now operate in the U.S., with several more coming. America is becoming the Saudi Arabia of gas — a prolific supplier of a commodity that is vital for everything from power generation to space heating and fertilizer.

Being the world’s gas supplier is an economic boon, but one with caveats: How much of our gas bounty to export could become a political football, particularly as voters see their power bills soar and worry that exporting more gas will lead to still-higher utility costs. Energy-intensive industries will feel likewise. These debates are not new, but look for them to take on more urgency before long.

Petrochemicals

The Iran war will help prolong North America’s petrochemical cost advantage, which had been narrowing amid lower oil prices and global overcapacity. Due to America’s abundant natural gas, U.S. chemical makers use ethane as a feedstock instead of the oil-derived naphtha that dominates in Europe, Asia and Latin America. With global oil prices up almost 50% since before the war started and U.S. natural gas still at low prices, ethane now has a clear cost advantage over other countries’ naphtha.

Still, expect the industry to be cautious about ramping up domestic capacity, given the prewar state of the market, in which many older and higher-cost producers were under pressure. About 10 million tons of ethylene capacity was slated for closure, a number that could rise to 20 million tons, or 10% of global capacity, by 2028. An effort to increase domestic fertilizer production is already under way. The Department of Agriculture expects capacity to increase by more than 4 million tons, thanks to a revived and revised Fertilizer Product Expansion Program (FPEP). The FPEP will help fund new production facilities in Iowa and Washington.

The Trump administration has also focused on streamlining other requirements for fertilizer producers. Officials aim to complete the permitting for a new CF Industries ammonia plant in Louisiana in 45 days. Ordinarily, it can take years. Once completed, the facility will be the largest of its kind in the world, producing 1.5 million metric tons of ammonia annually.

OPEC

Back in the Middle East, the Iran war poses a threat to OPEC’s dominance of the global oil market. Overshadowed by the fighting was the recent news that the United Arab Emirates, one of the oil cartel’s biggest producers, is leaving and pursuing its own energy policy. With Saudi Arabia, the UAE had long worked to balance oil markets by adjusting its output up or down to keep prices stable at levels that work for OPEC members. Now, it stands to pump more of its crude oil, lessening the cartel’s ability to control prices. That suggests greater volatility ahead, especially if more OPEC members decide they are better off operating on their own.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

When you think about Facebook, you don’t think about monthly subscription fees. Meta wants to change that with the upcoming launch of subscription plans.

Diversifying revenue makes sense for a company that makes 98% of its sales from ads. But another factor is at play: The need to cover the soaring cost of AI infrastructure. Meta is all-in on the AI race and recently raised its planned capital expenditures for the year to between $125 billion and $145 billion, mostly because of rising memory chip prices.

Meta’s sales are smaller than the other Big Tech companies that are plowing money into AI. And unlike the other three AI giants — Alphabet, Amazon and Microsoft — Meta doesn’t have a cloud computing business that sells computing to outside customers.

Meta hopes for new ways to pay for "superintelligence"

Subscriptions are part of a bigger transformation CEO Mark Zuckerberg laid out in the company’s most recent earnings call. It’s a "vision of superintelligence," Zuckerberg said during the first-quarter earnings call at the end of April. "Our goal is not just to deliver Meta AI as an assistant, but to deliver agents that can understand your goals and then work day and night to help you achieve them."

The specifics of this vision are a bit hazy, but the focus is AI agents, the autonomous tools that do multistep tasks on a computer. Zuckerberg talked about AI helping with health, education, relationships, social media content, games, and personal and career goals. He said AI agents could buy a shirt for your daughter or help researchers cure a disease.

"I think people are going to also be willing to pay a lot of money to have premium or high-compute versions" of AI that helps achieve goals, Zuckerberg said.

There aren't many details so far on the subscriptions, which were unveiled in an Instagram post by Meta's head of product. The company revealed pricing to some news outlets, including TechCrunch. The social media versions come with extra features, such as more analytics and methods to increase viewership for posts. The AI subscriptions offer the ability to do more complex tasks with higher caps on subscribers’ usage. Meta is also targeting businesses with paid AI tools that can answer customer messages, book appointments and close sales.

Meta faces an uphill battle with subscriptions

Meta subscriptions are a long shot for the consumer market. Users have gotten used to free social media, video, messaging and other features on Facebook, Instagram and WhatsApp. And the market for AI tools is fiercely competitive, as companies such as Google and OpenAI battle for consumers. It wouldn’t be surprising if Meta struggles to get the subscriptions business to a level that would be significant to its overall revenue.

But success is relative to Meta’s formidable scale. The company made $200 billion in sales last year and now has 3.5 billion people using at least one of its apps every day. With such a huge pool of potential customers to market subscriptions to, Meta could easily find millions of willing buyers, especially among dedicated content creators. Meta will likely offer the most cutting-edge AI features to paying customers, hoping to entice free users to upgrade.

Meta Subscription Plans

1. For Social Media and Messaging

• Instagram Plus: $3.99/month
• Facebook Plus: $3.99/month
• WhatsApp Plus: $2.99/month

2. For Creators and Businesses

• Meta One Essential: $14.99/month
• Meta One Advanced: $49.99/month

3. For AI Users

• Meta One Plus: $7.99/month
• Meta One Premium: $19.99/month

The challenge of tracking Meta’s AI spending ROI

One analyst asked Zuckerberg what he is watching to make sure there’s a healthy return on investment when it comes to the soaring capex spending. Zuckerberg said the focus is building a top AI model that goes head-to-head with Anthropic, Google, OpenAI and xAI. Then he said, "I mean like, I don’t think we have a precise plan for exactly how each product is going to scale month-over-month or anything like that."

The lack of specifics, tied to the exorbitant spending required to be an AI leader, is one reason some investors are concerned, even though Meta continues to point to growing ad sales as a benefit of AI.

However, part of this new AI vision fits with Meta’s tried-and-true strategy: Get users to stay longer and see more ads. Zuckerberg said AI helps Meta understand users in more detail and makes ads more effective. He also highlighted that Meta has always focused on building a huge audience first and making money later.

Meta says it has an escape hatch of sorts to avoid owning a glut of unused data center capacity. Zuckerberg says the company has flexibility to bring data centers online more slowly or reduce spending in future years. He’s even said Meta could launch a cloud computing business to rent out computing power to other companies.

Those ideas aren’t in the works yet. "Our experience so far has been that we have continued to underestimate our compute needs," said Susan Li, Meta's chief financial officer, on the earnings call. That’s mainly because Meta has aggressively rolled out free AI tools to both consumers and businesses, whether they want them or not.

This is not the first time Meta has pivoted

The transformation into an AI company, grounded by a massive social media platform, isn’t the first corporate shift. Recall how Facebook changed its name to Meta in 2021 to make a big push into the virtual reality-based metaverse, a move that hasn’t gained traction with users. That endeavor cost the company an estimated $80 billion.

It underscores Zuckerberg’s flexibility in pursuit of growth, like his abrupt shift to short-form video to compete with TikTok. That flexibility now underpins the bet on AI, his biggest one yet.

Editor's note: This story has been updated to reflect a quote is correctly attributed to Li.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Many closely held family-owned businesses don't have well-architected succession plans.

Children often choose to go in different directions, building lives outside the family business, and unaddressed succession issues can create uncertainty and family stress.

Even when there are apparent successors — such as adult children who grew up in the business — there's still a distinct need for open communication and careful planning.

Take the example of Tom, a septuagenarian sole owner and CEO of a sales representation and distribution business, who learned the business at the foot of his father, the founder and original owner.

During his tenure, Tom landed exclusive relationships with several powerful national brands and grew the business into a locally well-known brand with more than $20 million in annual sales, one year reaching more than $5 million in EBITDA.

Tom's sons each showed interest in working alongside him. They nurtured and developed sales contacts, met with the company's accountant, hired and fired employees — they learned the ropes. Tom's daughter expressed no interest in the business; she became a successful professional and moved across the country.

Tom expected one of his sons would eventually emerge as the clear leader, fall away or become interested in something different. Tom also thought that his daughter, busy with her own successful professional practice, would have no real interest in any of it.

He decided he'd figure out the business's succession "when the time comes."

In retrospect, what eventually played out was foreseeable, avoidable and not at all uncommon.

What wasn't going to work

The brothers devolved into rivals. Each son had important valuable skills that could help the business, but dividing leadership in a shared power arrangement wasn't going to work.

Then, as it turned out, Tom's daughter and her children had quite a significant interest in the business. While she never had any interest in running the business, it became clear that Tom's daughter had always carried an interest in what she perceived as "her share" of the finances. Her perception of fair didn't necessarily align with anyone else's.

The results? First, customers heard of possible uncertainty in the ranks. Management saw there was no clear designated leader. Tom's daughter? Things devolved to the point where she threatened to sue unless "her rightful share" of the business was clearly delineated.

This was not only a terrible mess for this family's relationships, but also a very challenging set of facts for the business and a clear threat to its continued success.

With closely held businesses, especially those that are family owned, it's rare that the primary owners haven't at least thought about succession.

But knowing the possibilities for difficult conversations, trying to avoid "playing favorites" and having a parental desire to see healthy relationships among their children all encourage procrastination.

Dodging issues postpones the inevitable

Unfortunately, avoiding the issues doesn't make them disappear; it just postpones facing them — and frequently, there is a very real cost.

Not only do unresolved issues tend to worsen and positions tend to entrench during periods of silence and no communication, but the business at the heart of these situations incurs substantial additional risk from the banked uncertainty.

There are several obvious problems:

• When family is involved, whatever happened at dinner last Christmas inevitably gets inseparably intertwined with why someone made a particular strategic business decision for the company.
• The company — which technically only speaks through its officers, directors and owners — suffers from the uncertainty and the potential picking of sides among key stakeholders.
• Instead of uniting a family around all the work that was done and the successes created, uncertainty in succession planning fosters divisiveness through infighting over control and economics, and legacy suffers.

Avoiding procrastination

The most successful family-owned/operated businesses share one common characteristic: Its key stakeholders communicate openly, honestly and often about the business.

These families openly acknowledge that they might have differing — often competing — interests when it comes to the business, and doing so can successfully compartmentalize these business issues. A few tactics can help.

Leverage the advisers. A trusted lawyer and a trusted accountant can carefully explain to all involved that they're working for the business. When representing the company — not any particular individual's — interests, they can be present to put the business first.

Having these advisers present and speaking for the business is a great way to encourage individuals to openly voice their own personal interests, knowing that it's the advisers' job to represent the company.

Focus on distinct business roles. Trying to avoid amorphous, subjective perceptions such as "That's not fair!" and instead relying on objective qualifications, skills and the business's needs can be very helpful.

Considering what characteristics the CEO should best display vs perceptions of "what's fair" to each of the owner's children can help with this. The subjective outcome of a scenario will always be present, the soft issues will always need to be addressed, but that's much easier to do after conducting a clear, logical, defensible analysis on the objective issues.

Once parties agree on the characteristics defining the best qualified candidate, they can then address the implications. "What's fair" has a place in the overall discussion about the business, but it should not be the guiding principle.

Write the plan and share it. Writing down conclusions and consensus — even directional consensus if the group hasn't finalized every specific detail — can be effective for some. The act of meeting with advisers and writing down outcomes goes miles toward the perception of a shared, well-vetted solution.

An experienced business lawyer partnering with an experienced accountant makes a perfect team to help closely held businesses navigate and address succession issues.

While every situation is unique and challenging — especially when family is involved — there's a common thread among successful ones: open, early communication.

Assembling professionals, scheduling a meeting (or a series of them), encouraging open and frank conversation, and documenting the progress and outcomes can help families work through succession planning effectively, considering what is best for both family and business.

Don't wait to figure it out later.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Golf is a great way to spend four hours, but it's a poor answer to the question, "What will my life be about?"

Ask almost any business owner in the middle of an exit what they are going to do "after," and a familiar list appears: More time on the golf course, maybe some travel, a bit of consulting on the side. After years of building a company, it sounds nice — and it's deserved.

Yet for many former owners, that loose collection of hobbies stops feeling like freedom within months after leaving the business. What looked like a dream from the boardroom suddenly feels like a drag.

This is the "highlight reel" problem, in which many owners fail to plan the actual weekly reality of their post-exit life. They picture golfing, pickleball, woodworking and working on classic cars — but not the third quiet Tuesday in a row without any big decisions to make.

Hobbies are narrow by design. They lack built-in structure across all seven days of the week. Nor can they replace the structure, identity and sense of purpose that came from running a business.

Loss of identity catches business owners off guard

In a single day, business owners may solve problems, lead people, make strategic decisions, negotiate deals and shape the future of the organization they built. Over time, that daily web of responsibility becomes an identity.

So, when owners exit without a role to grow into, that identity suddenly disappears. Owners who have spent decades building and running a business can find themselves with all the time in the world to do what they thought they wanted to do, but without the structure that once filled their days.

They sense emotional weight and begin to process emotional fallout — while also navigating complex legal, tax and family decisions. They may even stall, renegotiate or sabotage a solid deal because, at a gut level, they are not ready to let go.

Personal planning to complement financial planning

A strong post-exit strategy begins with a clear personal vision. Broadening out from that "ideal Tuesday," ask what a whole year looks like. Which roles will fill your time? Which priorities matter most — legacy, relationships, health, learning or something else?

A personal plan takes that vision and ties it to financial reality by mapping specific lifestyle decisions — travel, philanthropy, new ventures — to specific income sources and financial resources.

Personal planning should start before the business exit and run a regular quarterly and annual path alongside your business planning. It is the same cadence. Its financial architecture might distinguish between money set aside for lifestyle, investing, starting another company or charitable giving.

A good plan also acknowledges that life after an exit is rarely a solo decision. Owners should have conversations with their families about expectations for their newly acquired time and the role they want to play in the years ahead.

Of course, hobbies still have an important place. An owner might say something like: "Within six months of closing, I will sit on one nonprofit board, play golf twice a week, and take one trip with my family each year."

Those commitments fit within the income plan, and all aspects — including hobbies — are woven into a broader structure of purpose, relationships and responsibility.

A hobby can fill a Saturday. Only a personal plan can carry the weight of the decades after an owner exits.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

The information technology sector has been on a tear of late, supercharged by the AI spending spree. But now the IT sector faces headwinds that will put certain projects on hold.

Rising IT prices are starting to hamper overall spending

Spending raced ahead in the first half of this year as companies upgraded fleets of PCs and sales of smartphones surged, according to a recent presentation by IDC, a tech market research firm. Much of that spending was to get ahead of anticipated IT inflation and won’t be repeated in the second half.

Rising prices will be a drag on overall IT spending for the rest of the year, hitting IT consulting, HR software, laptops and other areas.

"Buyers continue to navigate an environment where cost pressure is really coming from every direction at the same time," said Stephen Minton, vice president at IDC, during the presentation.

Even before the Iran war sent oil prices higher, several issues challenged the IT sector, including tariffs, geopolitical turmoil and economic uncertainty. “All of those risk factors are really inflationary,” Minton said.

AI and cybersecurity are the exception to the rule

Spending on artificial intelligence and cybersecurity won’t let up, though: The two big exceptions to any IT belt tightening. Big Tech will keep spending on data centers, but they may have to defer some of their expansion plans into 2027 because of hardware costs.

Memory prices have absolutely skyrocketed, causing Alphabet, Amazon, Meta and Microsoft to fork over substantially more money for the memory chips needed in AI data centers. When it comes to the semiconductor sector, ’Memflation’ will destroy, or at least delay, non-AI demand into 2028, to varying degrees depending on the application,” said Rajeev Rajput, an analyst at Gartner, in an April press release.

Businesses will keep investing in AI, too, but with a bigger focus on seeing a clear return on investment, on a faster timeline. "We are at a point where measurable business value needs to be provided in order to continue with the rate of IT spending growth that we've had in the last couple of years," said Minton.

Meanwhile, all the geopolitical turmoil spells more cybersecurity spending, as threats keep rising. Security spending “really benefits from geopolitical disruption,” said Minton. That benefits cybersecurity vendors such as CrowdStrike, Palo Alto Networks, Fortinet and Zscaler.

IDC now expects IT spending growth will be significantly weaker this year than in 2025. However, there’s still an expectation that spending growth picks up again in 2027.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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A shifting economic landscape is reshaping venture capital in real time. The mandate hasn't changed — returns still need to materialize within a decade, often sooner — but the path to get there has.

Investors are tightening their filters, raising the bar and taking a far more disciplined approach to where they place their bets.

The old "spray and pray" model is fading fast. In its place is a more selective, high-conviction strategy: Fewer deals, deeper diligence and far more hands-on involvement. For startups, that means the margin for "almost good enough" has all but disappeared.

Writing a check is no longer enough. Venture capital now demands active involvement from both investors and founders. Those who simply fund or collect checks without participation are at a disadvantage.

The playbook has changed because the relationship has changed. The dynamic between investors and founders is evolving from arm's-length backing to active partnership.

The passive, brand-name VC has given way to builder-investors. It is less glamorous and much more demanding — walking the factory floor, digging into the codebase and solving real operational challenges side by side with founders.

Pressure from all directions

This shift is unfolding against a tougher backdrop: Inflation, higher interest rates, geopolitical tension, tariffs and waves of layoffs. Pressure is coming from every direction. It's a far cry from the conditions that defined the past decade.

For years, growth came easily. Capital was abundant, markets were expanding and portfolio companies often thrived with minimal investor involvement. A rising tide lifted just about every ship. Startups with the right idea and even modest traction could attract funding, despite clear cracks beneath the surface.

That tide has receded. Growth is harder to find, margins are under pressure, and execution matters more than ever. In this environment, venture capitalists can't afford to sit back. They have to get into the business and help companies navigate turbulence in real time.

The bar for funding is rising across the board. Traction is no longer a nice-to-have. It's the price of entry. Investors want to see a real, growing sales pipeline, not just a promising idea or early signals. Without that, even a well-crafted pitch is likely to fall flat.

That shift creates a far more demanding landscape for early-stage founders. The expectations have moved upstream, requiring companies to prove momentum earlier and with greater clarity, before outside capital comes into play.

What used to be light-touch engagement has become deeply operational. Investors aren't just advising from the sidelines — they're actively helping to build the business.

That means working the sales pipeline, making client introductions, following up, supporting hiring and recruiting, tightening budgets and forecasts, and even weighing in on product and engineering decisions alongside development teams.

In some cases, the line between investor and operator is blurring entirely. It's no longer unusual to see a co-investor serving not just on the board, but embedded in day-to-day operations. That would have been unthinkable a few years ago. Check-ins and occasional guidance have been replaced by real, ongoing involvement.

Even at the top end of the market, the shift is evident. The specifics may vary depending on stage and investment cycle, but the expectation is consistent: Founders want, and increasingly need, more than capital. They want engaged partners.

That engagement shows up across the firm:

• Platform teams are more involved
• Partners are making direct introductions
• Talent leads are helping shape recruiting strategy
• Associates are rolling up their sleeves and contributing in meaningful ways

That means more touchpoints, more accountability and far more hands-on support than ever before.

Raising the bar

This shift raises the bar for both founders and investors.

For founders, the takeaway is straightforward: Not all capital is equal. The right investor brings far more than a check.

As you raise, be selective. Look for partners who can help you operate, open doors to key customers, make meaningful introductions, connect you to strong co-investors and show up when it matters.

In this environment, who is on your cap table can matter just as much as how much you raise.

For investors, the bar has risen just as sharply. Access to the best deals no longer comes solely from past wins. Founders are choosing their partners more carefully and seeking investors who add tangible value.

If you want to see the best opportunities, you have to show up as the kind of investor founders want: Engaged, credible and willing to roll up your sleeves.

Capital is still flowing. Just look at companies like Harvey raising $200 million at an $11 billion valuation. But the era of easy money and easy investing is over. What's replacing it is something more disciplined: Smarter capital, deployed with greater intention.

Whether this more hands-on, high-touch approach ultimately delivers better returns remains to be seen. But it reflects a return to fundamentals.

In a more volatile, less forgiving economy, venture capital is being pushed back to what it was always meant to be: A true partnership, grounded in building, not just betting.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Once upon a time, an average team faced a simple but frustrating problem: Their basketball was stuck high in a tree.

The team captain removed his shoe and threw it at the ball, hoping to knock it loose. The shoe fell back to the ground, while the basketball remained firmly lodged in the branches.

On their second attempt, the average team concluded that the issue was the strength of the team captain. After assessing each team member, they chose Joe, whose greatest strength was his throwing power.

Joe took a few practice throws, adjusted his stance and launched the shoe toward the basketball. The result, however, was the same: The ball stayed exactly where it was.

For their third attempt, the team shifted from strength to strategy. They conducted a team planning session, carefully analyzing the situation. They studied the structure of the tree, examined the branches and mapped out the precise point the shoe needed to hit to dislodge the ball.

When they implemented their plan, everything went exactly as they designed it. Yet, despite their perfect strategy, the basketball remained stuck in the tree.

Across the street, another team had been observing the situation. After watching the third attempt, they walked over to offer their help. The other team assessed the tree and then the shoe.

Without much hesitation, they threw the shoe into the tree, lodging it alongside the basketball.

The average team reacted immediately with frustration, pointing out that the situation had only worsened now.

Calmly, the other team responded that they did not make the problem worse. Instead, they removed the thing (the shoe) that was preventing the average team from seeing the obvious solution.

They then pointed to a ladder nearby.

How this relates to running a business

I've consulted with thousands of businesses, mostly RIA firms, for nearly 25 years now. And I have observed the pattern illustrated in the above story at many different levels and in firms of every size.

The distinction between the two teams is subtle, but significant. The average team believed the problem was the basketball stuck in the tree, and they focused all of their effort, strength and planning on dislodging it.

What they failed to recognize was that their solution — the shoe — was in the way. Until the shoe was removed, no amount of additional strength, effort or strategic planning would change the outcome … unless they were lucky.

In my years of consulting, I have found that from the outside, the best-run firms appear remarkably similar to their peers. They offer comparable services, serve similar clients and often rely on much of the same technology. The difference is not visible on the surface, unless you work inside those firms.

Internally, the best-run firms operate with a fundamentally different kind of logic. Their effectiveness, performance and growth rates are driven less by perfect strategies and more by how they think about problems.

They move faster not because they do more, but because they simplify decisions, identify what matters most and act on them without hesitation.

This logic is the defining difference between average growth and exceptional growth.

How the best-run firms separate themselves

I have been able to observe this clearly through the length and depth of our consulting relationships, many of which span years and even decades.

That kind of sustained engagement provides a unique vantage point: We are able to see not just what firms say they will do, but what they consistently do over time and how those decisions compound.

The best-run firms separate themselves because of this discipline.

The firms that have grown from small practices into national leaders, many of which I have had the privilege to work with, did not achieve their success by refining the equivalent of the shoe.

They achieved it because they consistently recognized when the method itself had become the problem. In doing so, they avoided the trap of repeated effort, the kind that consumes time and capital and ultimately exhausts talented people without producing meaningful results.

By contrast, average firms tend to spend significant time discussing their challenges, analyzing their situation and documenting their strategic or growth frameworks (or learning someone else's).

They provide detailed explanations of leadership dynamics, communication preferences, planning processes and internal meeting structures.

While these efforts are well-intentioned, they often fail to isolate the single limitation that is actually slowing their progress.

In many cases, the focus shifts toward improving performance within the existing approach rather than stepping back to question whether the approach itself is the problem. As a result, energy is applied in ways that feel productive but do not change results.

The best-run firms collapse and simplify that entire mentality. Instead, they operate from a more fundamental understanding: At any given moment in the growth of a business, there is a bottleneck (in consultant-speak, it's known as the Theory of Constraints) that limits the organization's ability to move forward.

Just as important, they have accepted that this is not a one-time exercise. Each time a constraint is removed, another emerges. Progress is achieved through continuous identification and removal of what is in the way.

Where these firms' success comes from

The effectiveness of these firms comes from their discipline. They do not get distracted by complexity, nor do they confuse activity with progress.

They remain focused on the single question that matters most: What is in the way, right now, today?

Once identified, they act decisively to eliminate or replace it and then immediately turn their attention to what follows. Over time, this creates a compounding effect that is often mistaken for superior strategy, talent or marketing, when in reality it is the result of consistent, focused implementation.

I understand that not every firm aspires to be the largest or most prominent business. However, regardless of size or ambition, the responsibility of leadership remains the same.

Your role is not to perfect every system, satisfy every preference or refine every strategy.

Your role is to identify what is preventing progress and remove it.

In other words, stop throwing the shoe — and go get the ladder.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

In recent years, portfolio construction conversations often centered on where returns might come from next.

For the remainder of 2026, the starting point is shifting back toward a different question of how portfolios may behave if markets don't move as expected.

That change reflects a broader reassessment of diversification and downside management, particularly after recent market shifts challenged long-standing assumptions.

Take the 2022 market as an example. Stocks and bonds declined together, and the diversification benefit that many investors expected from fixed income did not materialize. Bonds worked as a hedge during previous market downturns, including the 2008 global financial crisis.

But more recently, correlations have proven less stable. While stock-bond correlations moved back toward negative territory after 2022, they have shown signs of shifting again. For advisers relying on a traditional 60/40 framework, that variability matters.

At the same time, ETF usage continues to expand as advisers refine portfolio construction tools. U.S.-listed ETFs gathered more than $1.5 trillion in net inflows in 2025, the highest annual total on record, according to State Street.

The report highlights how ETFs are increasingly used for targeted exposures and portfolio precision rather than solely broad index replication.

Within that broader growth, defined outcome and buffered ETFs have continued to gain traction. Assets in U.S.-listed defined outcome ETFs have grown to about $70 billion, with several billion dollars in net inflows in 2025, according to ETF Database's 2025 category analysis.

Forward-looking data also suggests sustained interest. In Brown Brothers Harriman's 2025 Global ETF Investor Survey, 29% of respondents indicated plans to allocate to buffered or defined outcome ETFs over the next 12 months.

Taken together, these figures suggest that defined outcome strategies may be moving beyond niche status and becoming more integrated into adviser toolkits.

Why now?

One factor could be renewed attention to how diversification functions in different market regimes. If stock-bond correlations are not consistently negative, relying solely on fixed income to provide downside protection may not deliver the expected results.

That has prompted some advisers to consider alternative approaches to managing equity risk while maintaining participation in the equity market.

Another factor is portfolio positioning. Despite strong equity performance over the past several years, elevated levels of cash and cash-like allocations remain in the system.

For some investors, re-entering markets with defined parameters around downside risk can provide a structured path back into equities.

When clients understand the range of potential outcomes in advance, including both the upside limitations and the downside buffers, conversations during volatile periods often become more grounded in agreed-upon parameters rather than short-term market headlines.

How does it work in practice?

In practice, advisers are incorporating defined outcome ETFs in several ways.

Some are carving out a portion of a core equity allocation, for example, within U.S. large cap exposure, and replacing it with a buffered strategy that maintains exposure to the same asset class while incorporating a predefined level of downside protection.

Others are using buffered ETFs as a redeployment vehicle for cash. Rather than moving directly from money markets into full equity exposure, advisers may choose a structure that provides participation on the upside while defining downside parameters.

A third approach involves carving out a portion of fixed income and reallocating to a buffered equity strategy. The goal in this case is not to eliminate fixed income, but to increase equity participation while incorporating a built-in layer of protection that does not depend on bond-equity correlation dynamics.

As these strategies have grown, misconceptions have emerged. One of the more common views is that the return cap embedded in many defined outcome structures represents an added "fee."

Structurally, the cap reflects the economic trade-off required to finance the downside-protection component.

Advisers evaluating these strategies must weigh that tradeoff in the context of client objectives and risk tolerance, but it is distinct from an explicit management fee layered on top of market exposure.

Bringing risk management to the fore

None of this suggests that traditional asset allocation frameworks are obsolete. Bonds continue to play an important role in income generation and duration management.

But recent market experience has reinforced a broader point that risk management considerations must be incorporated at the asset allocation stage, before they are urgently needed.

For advisers in 2026 and beyond, that shift is less about forecasting market direction and more about structuring portfolios with defined expectations. In that sense, risk management is not a defensive afterthought. It is becoming a core design principle.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

As we near this summer's 250^th anniversary of America's creation, the independent spirit is strong. It's certainly creating more millionaires, a number that has doubled since 2020.

The next-level wealth is out there, too, with Forbes reporting that $1.17 million to $2.7 million in net worth puts someone in the nation's top 5%.

For independent advisers seeking more of these HNW clients, the opportunity — and challenge — is clear: How do you stand out in a landscape crowded by banks, major wire houses and other independents?

There's a reason you became an independent adviser, and that needs to show; it's your unique brand and core values. But just as important, how does your independence benefit the high-net-worth client?

Full-service integration is key, but there's a distinction between internal* and external professionals who can add to your advisory services. When you outright explain that distinction and its benefits to the client in front of you, you can win business with clarity and conviction.

What high-net-worth clients want (and expect)

High-net-worth clients rarely deal with simple planning issues. Their lives often include closely held businesses, trusts, estate questions, charitable goals, tax complexity and family dynamics across generations.

They need more than investment management. They need advice that fits together across legal, tax and financial decisions.

Generally, firms are making two main choices: Either bringing legal and tax professionals into the same office,* or relying solely on external legal and tax professionals to supplement the firm's core comprehensive (Income, Investments & Wealth Management, Tax, Health Care & Wellbeing and Estate & Legacy) financial planning services.

Types of Integration

As many independent firms grow, there is often a desire to add services internally* that were once external. Advisers will choose to bring legal and/or tax professionals together in the same office* to have a differentiator, a potential advantage over those who do not.

"Comprehensive financial planning" can be marketed as a convenience for clients, who can meet with all their financial professionals in the same office, perhaps on the same day — a total experience held under common ownership, control and operation.

For external integration, advisers choose to maintain traditional comprehensive financial planning functions while using separate tax and legal professionals outside the firm, working with them in ongoing relationships to serve the same client.

This can offer an unbiased perspective and oversight from outside the firm, as well as a similar level of integrated services (given well-defined external relationships).

Internal vs external integration

The appeal of the internal model* is easy to understand. A firm can coordinate and collaborate tax and legal functions (with proper verbal or written authorization) in a streamlined process and offer clients one office, one team and one brand. That sounds efficient and marketable.

But advisers should be honest about a potential tradeoff. Convenience is not the same as independence. When one firm controls investment, tax and legal planning, the client may get a seamless experience, but not enough independent outside oversight.

When the other disciplines, be they tax or legal, answer to the wealth management leadership, they often become beholden to them. Advice may still be coordinated and collaborated, but it's not independent when the same firm wears multiple hats, creating new, unnecessary liabilities and conflicts of interest for the firm and its clients that a true independent model avoids.

That is where an unbundled model can stand apart. The external integration model does not mean working alone. It means the client benefits from independent professionals across key disciplines.

In practice, that often means the adviser coordinates and collaborates (with proper verbal or written authorization) the overall strategy, while outside attorneys and tax professionals provide legal and tax guidance.

Those external professionals are not held under common ownership, control or operation of the financial adviser. They are free to agree, question or push back based on their own professional judgment. That creates checks and balances.

That is not fragmentation. It's coordination and collaboration.

True independence

Many advisers chose independence for good reasons. They wanted to move away from quotas, product pressure, cross-selling and centralized control. They wanted more freedom to serve clients well.

Yet some firms slowly rebuild the same structure they once rejected. They add departments, bundle services and create an internal system that starts to resemble the big institutions they left behind. The branding looks different, but the operating model feels familiar.

That should raise a hard question: Are you truly independent, or have you re-created a smaller version of the same model?

This is not a knock on growth. It's a warning about drift. If every professional involved in the client relationship is held under common ownership, control and operation, your model may be less independent than your messaging suggests.

Labels and messaging to attract HNW clients: Don't muddy the waters

Many high-net-worth clients meet advisers through various channels, including referrals, ads, seminars and centers of influence in their phone's social scroll.

The advisers they see in these channels often label and market their HNW services in many ways. Independent advisers often adopt titles such as "family office," "integrated wealth manager" or "private client services."

The trouble? These labels can mislead.

For example, "family office" is legally defined by the SEC as a firm that:

• Provides advice only to family clients (lineal descendants and certain key employees)
• Is wholly owned and controlled by family members or family entities
• Does not hold itself out to the public as an investment adviser

Most independent firms don't meet this definition, which can create confusion.

"Private client" was originally a bank term denoting exclusivity and white-glove service, but that doesn't necessarily describe integration.

Ultimately, it can be helpful to drop titles that don't fit. Instead, consider terms like "high-net-worth services" or "integrated wealth management."

More importantly, take time to explain your actual process. Explain exactly how your teams, internal and external, actively coordinate and collaborate for the client's benefit across their financial spectrum.

The HNW takeaway

In an industry where terminology can cloud the picture, the advisers who win are those who clarify how their assembled team delivers real integration. They do this with transparency and client-first planning.

Ultimately, clients need a planning structure and professionals who can work together for them, combining coordination and collaboration with objective review and oversight. That's the real message. True independence means independence for all involved, including the client.

If you can explain that plainly in the high-net-worth world, you offer something many firms do not.

* Tax Services (tax advice, tax returns & forms preparation & filing) and Estate Planning Services (legal advice, estate planning legal document preparation & execution) may be housed in the same or nearby office. However, they must be separate legal entities from your investment advisory and/or insurance practices (i.e., they may be held under common ownership, control, or operation).

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

The semiconductor industry is booming, defying historical precedents as sales surge amid red-hot demand for costly artificial intelligence chips for data centers. The biggest problem chipmakers have now is that they can’t keep up with demand.

Skyrocketing chip sales push past $1 trillion

Global chip sales will soar past $1.3 trillion in 2026, a whopping 60% rise versus last year, the fastest pace in two decades, according to a recent forecast by Gartner, a tech market research firm. To put the staggering growth in context, back in 2021, industry analysts hoped that yearly sales would hit $1 trillion by 2030.

AI chips will account for 30% of chip sales in 2026. Meanwhile, rising memory demand has caused prices to explode, so memory chips are taking a far bigger cut of total chip revenue. Sales are powered by Big Tech spending that funds massive AI data centers. Alphabet, Amazon, Meta and Microsoft are planning more than $700 billion in capital expenditures this year.

NVIDIA is the biggest winner. Its AI chips used in data centers will see $333 billion in sales in its fiscal 2027 (this calendar year), up over 70% versus the previous year, according to a forecast by Morningstar. It’s the top chip seller, by far. Other chipmakers are riding the wave, including AMD, Samsung, Broadcom, Intel, SK Hynix and Micron. There’s rising demand for alternatives to Nvidia, too, such as chips from Alphabet, Amazon or start-up Cerebras.

AI is shifting what computer chips are needed

A major shift is underway for the chips needed to power soaring AI usage: More central processing units (CPUs) for every graphics processing unit (GPU). GPUs from Nvidia are used to train powerful AI models and also generate text, images, video, data, audio and more.

But CPUs excel at "agentic AI," the autonomous AI tools that take on traditional computing tasks, such as sorting files, querying databases and debugging code. The shift has changed the ratio of CPUs to GPUs needed from 1:8 to 1:4. It’s expected to move to parity or even flip slightly. NVIDIA has a stranglehold on the GPU market, but it also makes CPUs, and recently said it’s on track to make $20 billion in CPU sales this year.

Strengthening CPU demand has Intel’s revenue finally rising, marking the start of a comeback for the long-suffering chipmaker. The company’s bread-and-butter is CPUs and it missed out on the GPU boom needed for building top AI models.

"A year ago, the conversation about Intel was about whether we could survive," said CEO Lip-Bu Tan during Intel’s recent earnings call. "Today is about how quickly we can add manufacturing capacity and scale our supply to meet enormous demand for our products." That includes its flagship Xeon chip line for data centers.

AMD sales are exploding, too, as it looks to outdo Intel in the data center market. "With Intel facing supply issues and unable to meet the insatiable demand for CPUs, AMD benefits as a solid alternative," writes Neil Shah, analyst at Counterpoint research, in a recent article.

"We've seen how AI adoption is really unfolding [and] we're seeing significantly more CPU demand from really every major cloud provider as well as enterprise customers," said CEO Lisa Su in a recent earnings call. Su estimates the CPU market will grow 35% per year over the next five years.

Chip manufacturers race to meet the demand

When it comes to manufacturing leading-edge chips, Taiwan Semiconductor Manufacturing Company (TSMC) still dominates, with huge orders from Nvidia and Apple, plus Broadcom, AMD, Qualcomm and others. Even Intel outsources some advanced chipmaking to TSMC, whose sales will increase 30% this year. TSMC has so much business that some will shift to Samsung and Intel, the only other companies capable of making the most advanced chips.

Intel’s new business of building chips for other chip designers is starting to gain traction, with Apple as a likely new customer. Intel already has deals with Google, Nvidia and others.

Now analysts and investors are watching to see if Intel can get high-volume orders from these tech giants. Intel’s latest leading-edge manufacturing process, known as 18A, is promising, but the real traction happens with the next generation. Known as 14A, the tech is designed for outside customers and is set to go into mass production as early as 2028. Intel hopes 14A offers a direct challenge to TSMC’s tech leadership.

Morningstar forecasts that Intel’s separate business for outside customers, known as Intel Foundry, will make $16 billion by 2030 and $48 billion by 2035. "The Apple deal, if consummated, gives us more confidence in these estimates," writes Morningstar analyst Brian Colello in a recent research note.

A note of caution on chip stocks

When it comes to soaring chip stocks, watch AI spending closely. Many businesses spending money on AI are now scrutinizing the return on investment. Tech giants’ enormous spending assumes that AI demand keeps increasing, as customers find ways to boost productivity, increase sales or streamline operations.

Near term, there’s no sign of AI adoption or spending slowing. AI leader Anthropic, for example, continues to see exploding sales, mostly from businesses. This trend has caused an extraordinary run-up in chip stocks. But if spending starts to cool off and chip sales stumble, investors in chip stocks should look out below.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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According to the latest research, a growing number of U.S.-based CEOs, entrepreneurs and high-net-worth individuals (HNWIs) are quietly building a plan B in Europe.

There has been a huge upsurge in enquiries about relocating and gaining European citizenship in the past two years, as well as a recorded increase in emigration. Many commentators see this shift as a strategic response to rising geopolitical uncertainty and political polarization at home.

Multiple factors driving demand

While violent crime and civil unrest in the U.S. are cited as key reasons for the increasing interest in emigration, fiscal strain also plays a role. Many investors are showing increasing caution around U.S.-based investments due to perceived economic insecurity and doubts about the long-term stability of the U.S. dollar.

Some voices have even questioned its future position as the foundation of the petrodollar system and a widely perceived current overvaluation of the U.S. stock market is also contributing to a growing lack of confidence in the U.S. economy.

In light of this instability, Europe is increasingly viewed as a viable alternative for many Americans. They see it as more politically stable and a safer place to raise a family.

Healthcare is perceived to be cheaper and more readily available, and, in a post-Covid world characterized by remote working, living there is no barrier to running a business.

While some may see the flexibility provided by dual/multiple residency and citizenship simply as the latest luxury, the lower cost of living and promise of a more relaxed lifestyle make retiring in Europe a particularly attractive proposition for many.

Providing a pathway to citizenship

While most, but not all, EU countries will allow U.S. citizens to apply for and attain dual citizenship after a period of legal residency, the options for attaining residency through investment (known as a Golden Visa) are limited. Portugal, Cyprus, Latvia, Hungary, Greece, Malta and Italy are examples that will allow foreign nationals to get legal residency in exchange for substantial investment in the local economy.

Portugal, however, has a key USP when it comes to pursuing citizenship. It's the only one that provides a pathway to citizenship without insisting on relocation to achieve residency (although it's still an option for those who want it). This is especially attractive to North Americans who would prefer to continue working and paying tax within their own country while pursuing residency elsewhere.

It's important to note, however, that Portugal has just confirmed an extension of the timeline for citizenship from the previous five to, now, ten years. Although this had some impact on demand, it still makes it an attractive proposition for business leaders and HNWIs seeking to establish a workable Plan B.

Complex rules require expert advice

The evolving nature of residency/citizenship rules, like those playing out in Portugal, are just one of the reasons why it's sensible to seek informed, professional advice before you relocate.

Portugal, for example, doesn't have a legal framework for regulating fiduciary financial professionals, unlike the U.S. You'll be in a far stronger position if you work with licensed finance professionals with a strong track record of dealing with the complexities of the Golden Visa system.

Advice around the tax implications, both at home and within the chosen destination, can be complex and difficult to overcome without expert advice. The same applies to any financial restructuring of pensions and investments.

You may also need help with property sourcing and purchasing, not to mention investment thresholds and minimum stay requirements that apply in different jurisdictions. HNWI relocations may also require reputational and compliance checks.

Basic Golden Visa requirements for Portugal

Establishing dual citizenship, or residency by investment, needs to be seen as a long-term journey. For example, as a minimum, applicants for Portugal's Golden Visa will need to:

• Maintain legal residence in Portugal, which is not the same as tax residence, for a determined number of years. For a Golden Visa, legal residence requires maintaining the investment and spending an average of seven days per year in Portugal
• Have a clean criminal record
• Satisfy an A2 Portuguese language standard — equivalent to being an advanced beginner — either through completing a test called the Certificado Inicial de Portuguêse Lingua Estrangia (CIPLE), or a certified language course of 150 hours or more

Demonstrate ties to Portugal — a subjective requirement that basically asks applicants to show an interest in, or connection to, Portuguese culture.

During 2025, the U.S. likely experienced near zero net migration for the first time in decades, with more people leaving than arriving. While this trend is set to continue throughout 2026, interest is rising at a faster rate than actual relocation owing to the time, expertise and financial investment required.

For the majority, expert support from a residency and citizenship specialist will be the main driver in transforming 'Plan B' from a pipedream into reality.

Related Content

• How to Get Dual Citizenship: Pros, Cons and Steps to Take
• Setting Up a Business Abroad? 6 Mistakes to Avoid, From a Singapore-Based Financial Planner
• Considerations for Americans Who Want to Move to Europe
• What to Expect from the Global Economy in 2026
• Why 2026 Could Be the Year to Reconsider Global Diversification

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Trust is in short supply these days, and not just in Washington.

Across American workplaces, confidence in leadership, information and intent has eroded, according to Gallup, in subtle yet deeply consequential ways. The result isn't just cultural discomfort; it's a direct hit to productivity, collaboration and performance.

Politics will grapple with the trust deficit in its own fashion. In business, however, the responsibility is more immediate and more actionable. Rebuilding trust isn't a messaging exercise: It requires a fundamental shift in how leaders show up, communicate and make decisions.

Why now? The ground has shifted. Employees operate in a more complex, skeptical information environment. The line between fact and fiction feels more blurred than ever.

Conflicting narratives and AI-driven deepfakes amplify this confusion. In this environment, trust is no longer assumed. It has to be earned — deliberately and consistently.

Adapting to an AI-integrated workplace hinges on one thing: Trust. Not the kind you frame on a wall, but trust that is built into the operational fabric of the organization. It shows up in how communication flows, decisions are made and how organizations learn at scale.

This is especially true now. People curate their own information streams and shape their own versions of reality, typically validating their existing world view. Inside and outside the workplace, individuals gravitate toward like-minded perspectives. Cliques reinforce these viewpoints.

Breaking through these filters requires leaders to be deliberate, consistent and credible, which requires them to go beyond traditional culture efforts.

The bottom line: Barriers are going up inside your organization. It's up to capable, forward-thinking leaders to break through them, earn buy-in, build confidence and make a clear, credible case for the path forward.

Fear of losing control

According to the 2026 Edelman Trust Barometer, a global survey of more than 33,000 people across 28 countries, 70% of people are now unwilling or hesitant to trust someone who differs from them in values, background, culture or approach to social issues.

This isn't polarization anymore. It's something more insidious: Insularity. And it's quietly destroying collaboration, productivity and innovation in workplaces everywhere.

The consequences are stark and measurable. Forty-two percent say they would rather switch departments than report to a manager with different values. Thirty-four percent say they would put less effort into helping a project team leader who has different political beliefs.

This isn't about office politics or personality conflicts. This is a fundamental breakdown of the social contract that underpins organizations' functioning.

When teams can't trust across differences, projects stall. Innovation dies. The best ideation is disrupted due to the lack of cognitive diversity and constructive conflict.

The result: People self-segregate into their ideological comfort zone.

Even within this environment, there's a clear path forward if leaders address the underlying dynamics head-on. Start with a simple reality: A meaningful segment of your workforce will be hesitant to embrace any change and specifically AI-driven change designed to boost productivity gains.

Why? It's not fear of change. It's fear of losing control.

AI, by its nature, makes people feel displaced in their own roles. According to a 2026 ADP research survey, only 22% felt their job was safe from elimination, with workers reporting feeling less certain about where they fit, how decisions are made and what remains in their hands.

That perceived loss of control fuels anxiety. The issue isn't the technology itself; it's the uncertainty it creates. When people feel they no longer have agency, resistance follows. Understanding that distinction is the first step to address it.

Leaders must recognize this fundamental shift in the workplace. Focus on empowering your people to expand their capacity to process everything happening. The only way to expand it is by raising their level of awareness.

The co-creation principle

There is a practical way through this: Involve people in building what comes next because people commit to what they help create.

As AI integration reshapes workflows, decision-making and expectations, employees' voices should be integrated into the design process. Let them help choose what tools are used, how processes evolve and what new norms take hold. Participation drives ownership, and ownership drives adoption.

That's why the age of AI isn't just a technology shift — it's a cultural one. And culture still does what it has always done: It determines whether strategy actually works. You can have the best AI roadmap in the world, but if the culture resists it, progress stalls.

In the past, organizations could operate with a baseline level of skepticism and still function. In an AI-driven workplace, that's no longer the case. Without trust, adoption slows, collaboration weakens and productivity suffers. Building that trust isn't optional. It's fundamental.

For organizations, the path forward requires discipline. Recognizing the environment you are actually operating in, not the one you wish existed. Then, take a hard look inward. Where are you misaligned between intention and execution, strategy and rewards, culture and compensation?

From there, move into action. Build human verification into AI workflows. Train your systems properly, because the old rule still applies: Garbage in, garbage out.

Just as important: Design environments that help people stay grounded and focused. Invest in practices that build resilience and expand capacity across the organization.

And through it all, engage your employees in the process. Give them a voice in shaping change.

I said it before and I will say it again, people commit to what they help create. In a low-trust, AI-driven workplace, that may be the most important advantage you have.

So take the lead: Invite your team to co-create. Organizations that figure this out won't just survive the age of insularity; they'll define what workplace success looks like on the other side.

Related Content

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

Businesses need to prepare for state privacy law enforcement, and fast. Total privacy fines in all 50 states soared to $3.4 billion in 2025, versus $1.8 billion in 2024, according to a recent analysis by Gartner, a tech market research firm.

For perspective, the total was just $1.2 million in 2023, before a frenzy of new state enforcement action took off. Penalties hit companies of all sizes and across industries: Health care, finance, software, communications, insurance, entertainment, retail, tech, legal, advertising and more.

The payouts stem from both state fines and lawsuits brought under these laws by injured parties. The state laws enshrine consumer rights and data protections that companies must abide by. Gartner says 22 states have passed privacy legislation aimed at consumer rights and another 24 are expected to pass privacy legislation in the coming five years.

State regulations related to the use of AI are expanding fast, too. More than 100 state laws covering artificial intelligence were passed last year, while state agencies also issued new AI-related guidance. For example, in California, the leader in privacy enforcement, a rule covers automated decision-making in job recruitment and employment.

"A lot of organizations have let their privacy policies atrophy," says Nader Henein, an analyst at Gartner who compiled the data. Many privacy programs were implemented years ago when California passed its sweeping privacy law in 2018, which was enacted in 2020. The landmark law provides consumers the right to know about the personal information being collected from them and how it’s used; the right to delete personal info collected by the company; and the right to opt out of the sale or sharing of personal info.

Notable Enforcements by the California Privacy Protection Agency in 2025

• $1.35 million fine against Tractor Supply
• $345,178 fine against Todd Snyder Inc., a clothing retailer
• $632,500 fine against American Honda Motor Co.
• Forced the shutdown of Background Alert, a data broker

"Companies should dust off their privacy program and assess whether it works," says Henein. They should check to make sure those policies are being implemented and cover new rules being rolled out. Gartner also recommends focusing on the online user experience, since most of the violations come from the privacy user interface, such as website privacy notices.

Companies doing business in multiple states should default to the one with the most onerous rules. For example, if consumers have a right to their personal data within 45 days of requesting it in one state, and 30 days in another, the target should be 30 days across the board, says Henein. In practice, that could mean a 20-day policy to ensure compliance.

"Most business-to-consumer companies have bought privacy software," says Henein. Vendors include OneTrust, TrustArc, Osano or TrueVault, and the software often includes AI-related governance. Nader says business-to-business companies, and smaller companies that cater to consumers, may use a more piecemeal approach.

These mounting compliance costs are sure to catch the attention of Congress. But a federal law that preempts the states is unlikely anytime soon, leaving businesses to cope with a patchwork of state laws.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Each week in our Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at four questions on available tax breaks for retirees with a side hustle. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Medicare premiums

Question: I am 72 years old, and I pay monthly Medicare premiums. I retired from my full-time job four years ago. I am now a part-time consultant and file Schedule C, reporting my income and deductions from my part-time gig, with my federal tax return. My financial advisor said I can deduct my Medicare premiums that I pay, even though I don't itemize on Schedule A. Is that true?

Joy Taylor: Yes. As a general rule, medical expenses, including premiums paid for medical insurance and Medicare premiums, are deductible only by itemizers on Schedule A, and only to the extent that total medical expenses exceed 7.5% of adjusted gross income. There is an exception for self-employed individuals who file Schedule C. They can deduct premiums that they pay for medical and dental insurance and qualified long-term-care insurance without itemizing on Schedule A. They claim the self-employed health insurance deduction on Form 1040, Schedule 1, part II, line 17. Parts A, B and D Medicare premiums that you pay for insurance in your name are part of that deduction.

2. Business driving

out expenseQuestion: I retired from my full-time job a few years ago and receive a pension. I decided this year to take on part-time work as a dog walker. I work for myself, and I drive to my clients' homes to walk their dogs. I plan to file Schedule C with my 2026 Form 1040. Can I deduct the standard mileage rate for my business driving?

Joy Taylor: Yes. The cost of business driving for self-employed individuals is a deductible business expenses. You can claim either your actual expenses, including gas, repairs and depreciation on your car, or the IRS's standard mileage allowance. For 2026, the standard mileage rate for business driving is 72.5 cents per mile. If you use the IRS's standard mileage rate, you can also deduct the cost of any tolls or parking fees that you pay.

Be sure to keep a contemporaneous mileage log detailing each of your dog-walking trips. It will make it much easier for you to figure your total business mileage when you are preparing your tax return. It will also help you if you are ever audited by the IRS. Sloppy recordkeeping makes it easy for an IRS revenue agent to disallow your deduction.

3. Qualified business income deduction

Question: I recently retired from my full-time job, and I am now an independent freelance writer. I plan to file Schedule C with my 2026 Form 1040. Can I claim the 20% qualified business income deduction?

Joy Taylor: Generally, yes. Self-employed people, independent contractors and owners of LLCs, S corporations and other pass-through entities can deduct 20% of their qualified business income (QBI), subject to limitations for individuals with taxable income in 2026 of more than $403,500 for joint filers and $201,750 for single filers and head-of-household filers. This tax break, first enacted in the 2017 Tax Cuts and Jobs Act, was slated to end at the end of 2025. But last summer's "One Big Beautiful Bill" permanently extended the QBI write-off.

Note that you don't claim the QBI deduction on Schedule C. Instead, you would attach Form 8995 or 8995-A to your return and take the write-off on line 13a of Form 1040.

4. Home office

Question: I am a lawyer. I retired five years ago from my law firm. Even though I'm retired, I still do legal work for some clients on a part-time basis. I am an independent contractor now and file Schedule C with my tax return. I recently turned one of the bedrooms in my house into a home office where I can do my work. Can I claim the home office deduction on Schedule C?

Joy Taylor: Yes, if you meet all of the rules for claiming the write-off. Even though employees can't take a deduction for home office expenses, the write-off is available to self-employed people or independent contractors who file Schedule C with their 1040 and use a room or space in their home or apartment exclusively and regularly as their principal place of business. If you qualify for the write-off, there are two ways to figure the deduction. You can allocate your actual costs on Form 8829. Or you can use a simplified option by deducting $5 per square foot of space used exclusively for business, up to 300 square feet, resulting in a $1,500 maximum write-off.

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the One Big Beautiful Bill, retirement accounts and more. We will continue to answer these in future Ask the Editor roundups. So keep those questions coming!

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our editors and experts, in this Q&A series, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to, constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial or tax advisor regarding any questions you may have in relation to the matters discussed in this article.

More Reader Questions Answered

• All Ask the Editor Q&As
• Ask the Editor: Will I be Audited by the IRS?
• Ask the Editor: How Can I Resolve My IRS Tax Debt?
• Ask the Editor: Tax Questions on Roth IRA Conversions
• Ask the Editor: Reader Questions on QCDs
• Ask the Editor: What Medical Expenses are Deductible?

For decades, obtaining a second passport was largely associated with lifestyle aspirations — retiring in Europe, reconnecting with family heritage or spending extended time abroad.

Today, however, a growing number of owners of U.S.-based small and midsize businesses are pursuing second citizenship or long-term residency for a very different reason: To strengthen their companies.

What was once a personal decision is increasingly becoming a strategic one.

Behind the scenes, entrepreneurs across industries — from e-commerce and manufacturing to consulting and tech — are incorporating global mobility into their business planning.

A second passport or foreign residency is no longer just about where you live. It's about how your business operates, grows and adapts in an increasingly unpredictable world.

Many business owners think about risk in terms of cash flow, supply chains or market competition. But fewer consider how much their company is tied to a single country's regulatory, political and economic environment.

That's starting to change.

A strategic move

For some entrepreneurs, a second citizenship acts as a form of strategic insurance. It can provide the ability to quickly relocate operations, open doors to new markets or ensure the business can continue functioning smoothly if conditions in one country become less favorable.

This doesn't mean abandoning the United States — it often means adding flexibility and creating options that didn't previously exist.

One of the most immediate advantages of second citizenship — particularly in a European Union country — is access.

For example, holding citizenship in a European Union (EU) member state allows business owners to live and work freely across all EU countries. That can simplify everything from opening a branch office to meeting clients in person without visa constraints.

For companies that rely on cross-border operations, this can be a meaningful advantage. It reduces friction, saves time and allows for more agile decision-making.

Even outside the EU, residency programs in countries with favorable trade relationships or regional access can help businesses expand more efficiently.

Widening the hiring pool

Another often-overlooked benefit is talent acquisition.

Hiring internationally can be complicated, especially when immigration rules, sponsorship requirements and processing delays come into play. Business owners with legal status in another country may find it easier to build and manage teams across borders.

In some cases, it can also make the company more attractive to global talent. Employees might be more willing to join a firm that already has an established international footprint and the ability to operate in multiple jurisdictions.

Uninterrupted service

The past several years have underscored how fragile supply chains can be. From pandemic disruptions to geopolitical tensions, many companies have experienced delays, rising costs or sudden changes in availability.

Having a legal and operational foothold in another country can help mitigate some of these risks. It might allow businesses to diversify suppliers, establish alternative production locations or shift logistics strategies more quickly.

The goal isn't to move everything abroad; it's to avoid being overly dependent on a single system.

Several steps to take

While the advantages can be significant, pursuing second citizenship or residency is not without complexity.

First, there's the time and administrative effort involved. Depending on the country and the pathway (whether through ancestry, investment or residency), the process can take months or even years.

Second, there are legal and tax considerations. The United States taxes its citizens on worldwide income, regardless of where they live. Obtaining another citizenship doesn't change that.

Business owners should work with qualified tax and legal professionals to understand how a second status might affect their obligations.

There can also be compliance requirements in the new country, including reporting obligations, local regulations or business registration rules.

Finally, not all programs are created equal. Some residency or citizenship-by-investment options come with high costs or changing regulatory environments. Due diligence is essential.

Where to locate

The "best" country depends heavily on your business model and long-term strategy.

Entrepreneurs with European clients or expansion plans often look to EU countries for the mobility and market access they provide. Those in industries such as manufacturing or logistics might prioritize locations with strong infrastructure and trade connectivity.

Others might focus on countries with favorable business climates, streamlined bureaucracy or access to specific regional markets.

For Americans with European ancestry, citizenship by descent can be one of the most cost-effective pathways, as it's based on lineage rather than investment. In these cases, the primary investment is time and documentation.

A different mindset

What we're seeing is part of a broader shift in how business owners think about resilience and growth.

In the past, international expansion often came later, once a company was firmly established. Today, many entrepreneurs are building with a global mindset from the outset. They are asking not just "Where do we operate now?" but "Where might we need to operate in the future?"

Second citizenship or residency is becoming one of the tools to answer that question.

Final thoughts

Not every business owner needs a second passport. For many, it might not be necessary or practical.

But for those with international clients, cross-border operations or a desire to build in more flexibility, it can be worth exploring.

The key is to approach it not as a lifestyle upgrade, but as a strategic decision — one that should be evaluated alongside other long-term business considerations.

In a world where change is the only constant, having options is increasingly valuable. For a growing number of entrepreneurs, a second passport is simply another way to create them.

Related Content

• How to Get Dual Citizenship: Pros, Cons and Steps to Take
• Setting Up a Business Abroad? 6 Mistakes to Avoid, From a Singapore-Based Financial Planner
• Considerations for Americans Who Want to Move to Europe
• What to Expect from the Global Economy in 2026
• Why 2026 Could Be the Year to Reconsider Global Diversification

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To help you understand what's going on in business and the economy and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

Another commodity facing Iran war fallout: Industrial metals. The Middle East conflict has disrupted supplies, increased production costs and created another headache for U.S. manufacturers already dealing with the effects of higher tariffs.

Aluminum has taken the greatest hit. Prices have jumped dramatically since the war began, damaging regional smelters and curtailing shipments from the Persian Gulf, where six countries account for a fifth of U.S. aluminum imports. The metal’s cost in the U.S. has grown by nearly 90% over the past year, fueled in part by tariffs jumping from 10% to 50%.

U.S. consumption totals 27 billion pounds of aluminum, used for everything from fighter jets to soda cans. The U.S. auto industry, in particular, is struggling, as higher costs and supplier outages hamper efforts to increase the aluminum content of its cars. North American automakers consume 30% more aluminum than they did in 2020. Transportation, including the aerospace sector, accounts for a third of U.S. aluminum demand, the most of any category.

Rising Chinese output should ease the deficit in global supply, now the worst since 2019, starting in the second half of this year. The U.S. could see its first new aluminum smelter since 1980, with construction set to begin later this year. Although the smelter won’t be up and running until the end of the decade, officials hope it’s the first of many new investments in U.S. capacity.

The war will affect the price of industrial metals in other ways. For example, mining costs tend to increase with oil prices. Iron ore operations are most sensitive, with costs increasing 4.2% for every 10% rise in oil prices, versus 3.5% for copper and 2.0% for gold. If oil averages $100 per barrel in 2026, mining costs could increase by 20% for iron ore, 16% for copper and 9% for gold. An ongoing sulfuric acid shortage also affects miners’ ability to extract minerals like copper and nickel from their ores.

Other factors will likely buoy industrial metals demand in the long term. Copper demand, for instance, is expected to increase 50% by 2040, with rapid growth in renewable energy and artificial intelligence adding to the metal’s industrial uses. Analysts also expect a growing copper shortfall, with production peaking in 2030.

Still, prices will fall if the energy supply crunch hits the global economy, which will become more likely if the two sides can’t sign a peace deal.

Keep an eye on metals with vital defense applications, such as tungsten, used in armor-piercing munitions and jet engine components, among other things. Global output is relatively small, 93,000 tons, vs. nearly 3 billion tons of iron ore and is dominated by China. It’s one of many metals included in White House efforts to coordinate supply with allies and reduce reliance on China.

Despite tensions over Iran, Greenland, defense spending and more, the U.S. and EU are deepening their cooperation on critical minerals. The two sides have signed a memorandum of understanding that could pave the way for common standards on mining, processing and recycling, as well as price floors and strategies for stockpiling minerals and addressing supply disruptions. The move is yet another step towards a U.S.-led critical minerals trade bloc. Washington has already agreed to similar action plans with both Japan and Mexico. China continues to dominate global supply chains for critical minerals like lithium and rare earth elements: 60% of production and 85% of refining capacity.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

Read more

• War in the Middle East Spells Higher Inflation for U.S. Consumers
• The Best Precious Metals ETFs to Buy
• The Best Materials Stocks
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• Is Investing In Gold Worth It? How Gold Prices Have Changed

To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

If cutting-edge artificial intelligence could truly tame the daily onslaught of emails, it would make a huge difference for tens of millions of workers. Microsoft, which dominates workplace email with Outlook, thinks it has a solution with its AI-assistant, Copilot.

"Until now, Copilot in Outlook helped with the task in front of you: drafting an email, catching up on a long thread, or finding a time to meet," Microsoft says in a recent blog post. "Copilot in Outlook is now agentic, taking on the ongoing work of running your inbox and calendar."

That tech update, if it works well, means that a helpful tool is turning into a true personal assistant, with the ability to tackle complicated inbox tasks. Microsoft says its AI tool can automatically schedule meetings, send emails to coworkers and recommend which meetings to decline. It promises to automate follow-ups with employees that haven’t responded, pinpoint messages that are urgent and reschedule conflicts.

To make the system work, users write simple commands for the Copilot chatbot. For keeping tabs on responses to an important project, Microsoft says to tell the Copilot chatbot to "Identify people who haven’t replied to my emails after 24 hours, prioritize the ones that matter most, and draft polite follow-up emails for me."

For complex emails, the company suggests writing, "Pull the latest updates on [project name] over the last week. Draft a confidential, high‑importance update email for my manager." After a week off, try telling Copilot, "I just returned from vacation. Help me catch up: summarize what I’ve missed, highlight what’s most urgent, and draft a short briefing email. Then suggest emails I can safely archive and 1-2 tasks I should focus on first."

This type of automation holds promise but could also create new problems. If workers are increasingly responding back and forth to AI-created messages rather than human-written ones, there could be more confusion and miscommunication. The accuracy of automated decision-making and AI’s ability to understand nuance are other key elements that will make or break the tech.

As these capabilities roll out to tens of millions of workers, it could mark a major shift in workplace communication. The potential for time savings is very real, especially for managers, salespeople and other workers inundated with messages that require a response.

The AI-enhanced features are currently available for those in a Microsoft AI early adopter program and require a Copilot subscription, which ranges from about $20-$30 per user per month. Expect it to be widely available soon for Copilot subscribers.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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To help you understand what's going on in politics and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

The midterm elections are six months away. Here’s our early take on how things will go down.

Democrats have a chance to make big gains, with President Trump and his party reeling from sticky inflation and an unpopular war with Iran.

Republicans have lost ground with key groups of voters who helped power Trump to victory in 2024: Hispanics. Working-class white women. Gen Z men. And historically, the party controlling the White House tends to lose congressional seats during the midterms.

Democrats currently lead in the generic ballot, a rough measure of which party voters would prefer to control Congress, by about six points, on average. They should retake the House, where Republicans are down to a six-seat advantage after deaths, resignations and special-election losses.

How many seats they will gain is hard to say. While political conditions generally favor the Democrats, the party still must contend with its own image issues, as well as Trump’s persistent popularity with a small but loyal group of voters.

Redistricting has given Republicans a key advantage. While the legal issues are not completely settled, Republicans in several Southern states have drawn more GOP-friendly congressional maps in response to a recent Supreme Court decision narrowing the power of the Voting Rights Act. Democrats, meanwhile, have encountered legal setbacks in their efforts to do the same in Virginia.

Senate Democrats have a real possibility of flipping at least three GOP seats. In North Carolina, Democrat Roy Cooper comfortably leads his Republican rival, Michael Whatley. Maine Republican Senator Susan Collins is in the political fight of her life. The Ohio race, pitting GOP Senator Jon Husted against former Senator Sherrod Brown (D), is a toss-up. Dems also are bullish about their chances of defeating Alaska GOP Senator Dan Sullivan. Plus, Democratic candidates in key races are raising more cash than the Republicans.

The party needs to pick up at least four seats to gain control of the chamber, a tall order, given the rest of the Senate map. Republicans are defending more seats this year (22) than Democrats (13); however, all but one are in states that Trump won. By contrast, Dems are defending two seats in states that Trump won: Georgia and Michigan.

The odds still favor Republicans maintaining control of the upper chamber.

Whatever the results, expect the current gridlock in Washington to get worse. By controlling just one chamber of Congress, Democrats will effectively have a veto over future Trump legislative priorities and more opportunities to conduct oversight.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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To help you understand the trends surrounding business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts. (Get a free issue of The Kiplinger Letter or subscribe.) You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here's the latest…

How much extra would you pay for satellite internet direct to your phone? That’s the $100 billion question satellite companies are asking these days. The technology promises to help users stay connected even in the most remote areas where cellular service is unavailable. It can be used for emergency messaging, web surfing and even video calls. It requires no extra hardware, either.

The nascent direct-to-device market has the satellite industry buzzing with excitement, even if the business model, customer demand and technical solutions are still up in the air.

Satellite firms are making huge bets

SpaceX, the current leader, has plans for 15,000 more Starlink D2D satellites and spent $17 billion to buy airwaves from EchoStar to boost its service. SpaceX says its next-generation D2D satellites will be competitive with 5G service from Verizon, AT&T, T-Mobile and top carriers around the world.

Meanwhile, Amazon recently bought Globalstar for $11.6 billion to enter the market with its coming satellite constellation. Globalstar provides D2D for Apple iPhones. Other firms working on D2D include AST SpaceMobile, Lynk Global, MDA Space and SES.

Market research firm Novaspace forecasts cumulative revenue from D2D hitting $100 billion through 2034. Backers think the business will be a key growth area for the booming space industry. Optimistic forecasts are a major justification for the sky-high $2 trillion valuation SpaceX is seeking when it goes public this summer. A recent report by PitchBook, a Morningstar company, has a very bullish forecast of SpaceX scaling to 750 million D2D subscribers by 2040.

For now, satellite usage by consumers is limited

D2D is currently used for emergencies, simple text messages and apps that use only small amounts of data. Rather than primary connectivity, it’s a useful backup in spots without cell service. Ookla, a company that tracks internet performance, found that only 0.46% of U.S. users recorded a connection to a D2D satellite in March 2026.

"We're seeing a lot less usage than we were originally thinking,” said T-Mobile CEO Srinivasan Gopalan in the company’s recent first-quarter earnings call. “But it's a great complementary product.”

T-Mobile's satellite service
The telecom company, which partnered with SpaceX, offers satellite service free for top-tier T-Mobile plans and charges $10 per month for other customers. The service, called T-Satellite, can be used for text messages, voice chat, 911 and apps such as WhatsApp, AccuWeather and Apple Music. Most usage has been in national parks.

Apple's satellite service
Apple currently foots the bill for its satellite service, which works on newer iPhones to connect with emergency services when users are off the grid. Who pays will be an increasingly pressing question as satellite firms try to stoke demand. Trying to get consumers to pay extra will be tough since cellular service covers so much of the country and globe. Plus, it’s not as easy as connecting to cell service. Apple says you need a direct view of the sky and horizon and messages could take 30 seconds or more to send.

What's next for consumer satellite services?

Speeds will get faster and the tech will soon be available across hundreds of millions of global devices. By 2030, nearly half of the mobile phones shipped will have satellite capability, according to a recent analysis by Counterpoint Research.

However, the market is likely smaller than the most bullish forecasts. Skeptics highlight the technical limits of signals from space reaching smartphones, including that it typically only works outside. Meanwhile, terrestrial cell service continues to get faster and better.

But for users plagued by dead spots and outages, it’s an exciting development that’s worth investigating. For hikers and adventurers, it could be lifesaving in an emergency. And it’s worth watching the new capabilities that roll out from SpaceX and others. Still, for primary cell service, it’s not likely to replace your current provider anytime soon, or maybe ever.

Next year promises to shed light on the market. That’s when SpaceX is poised to see meaningful revenue, say analysts at Quilty Space, a space market research firm. With the company going public, investors could soon have much more info about the market.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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Every day now, there is one term we seem to hear constantly on the news: Negotiation.

You would think that most lawyers would be pretty good at it, and you might even assume we were all required to take courses about negotiation in law school.

Nothing could be further from the truth, and I'm going to tell you why the just-published Never Settle: Persuasion and Negotiation Skills to Get What You Want will, in my opinion, soon knock other "negotiation bestsellers" off their pedestals and will help everyone who's looking for a commonsense, understandable, actionable guide that takes the mystery out of the negotiation process.

Plus, it's an enjoyable read.

The authors, Attia Qureshi and John Richardson, have taught at Harvard and MIT and have real-life experience with high-stakes negotiating, including hostage situations involving the FBI and negotiations in the world of diplomacy. Their outlooks provide a seriousness that's often lacking in attention-grabbing, commercially driven titles.

Also, their personalities — delightful on Zoom — are ever-present in this gem of a resource.

I'll share more of what makes Never Settle a worthwhile read in a moment, but first, here's a brief story of embarrassment, told by "Janet," an attorney and spouse of a lawyer fresh out of school. Her husband had been assigned to conduct a complicated lease negotiation at the firm where they both work.

"'James' had no experience in negotiations, but the senior partner told him to 'use our library and find things to read on negotiations.' He did that, we both met the other side in this matter, and within minutes, it was horrible. My husband just fell apart. He caved in and gave away 'the farm'!"

She asked, "Mr. Beaver, do you know of some accessible book not filled with jargon that we can read, because everything (James found) in the firm's library (focused on) complicated theory."

Janet had zeroed in on one of the greatest shortcomings of so many books that claim to "make you a better negotiator": They are filled with jargon and lack practical guidance.

And, would you believe, there are more than 10,000 books available on Amazon in the category "Negotiating - Management & Leadership," covering various aspects of business and personal negotiation.

What makes this book so different?

Even excellent books on negotiation often share a common limitation: They are primarily based on theory, and readers can be left with the illusion of having gained competence just by reading alone.

The fundamental premise of Never Settle is that we do not get favorable results by studying theory about the negotiation process but, instead, by practicing the actual skill. When you learn to, say, play golf, tennis or the piano, it takes disciplined practice — not memorizing a set of rules — to create a champion.

This approach is what makes the book a real standout. It does not leave you filled with concepts, thinking, "Yes, I get it." Only to realize, during a real negotiation, as you turn all colors of the rainbow, "I thought I could do it, but I can't."

The authors make clear that "learning about negotiation is not enough — you've got to train for it."

And that is precisely the angle the authors take, just like a coach would. In a constructive way, they take us through exercises, drills and practical scenarios applicable to everyday life.

They encourage us to "gamify" simple interactions in role-playing simulations — for example, asking for minor concessions, practicing how to refuse and listening to the persuasive power of our tone of voice.

The exercises are more than games, though. They help us develop skills that become readily available when we're dealing with serious issues. By weaving practice into the reading experience, the authors encourage us to use what we've learned, which leads to confidence, strategies and competence.

This is where the book outperforms others. Never Settle does far more than provide a knowledge basis. It serves as a training manual — with a giant dose of "Vitamin Yes, I can do this!"

Additionally, because the authors frame negotiation as a daily activity, it becomes a life skill, rather than a specialized skill reserved for lawyers or executives.

Emotional intelligence and self-awareness

Understanding your own interests, as well as the other party's, is an important feature of the book.

I can tell you from my own experience in business and family law that, when sitting down to a four-way negotiation, each side represented by an attorney, failure is virtually guaranteed if you don't have a clear understanding of the difference between what your client tells you they want and what they actually want.

The same is true for the other party. It is a matter of being self-aware, without getting hung up on tactics, strategy and pressure, and focusing instead on your client's priorities and acceptable outcomes.

The authors want us to put ourselves in the other side's shoes and work toward a fair resolution.

Where ethics and integrity matter

I have read several negotiation books that encouraged manipulation, a win-at-all-costs approach and a scorched-earth philosophy that turned my stomach. I've seen this in action, with lawyers trading short-term gains for destroyed relationships.

Never Settle is the breath of fresh air we need at this time in our country, where ethical conduct and integrity often seem to be missing. The authors preach the gospel of achieving mutually beneficial outcomes and, at all times, maintaining good faith.

For anyone who has had difficulty mastering the art of negotiation, Never Settle's exercises and can-do approach set you on a path of confidence and competence in what mankind has always done — bargain.

Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

To help you understand what's going on in business and technology and what we expect to happen in the future, our highly experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest…

The Iran war has reinforced a new fact of life: The importance of drones in modern warfare. They’ve helped Tehran hold out against Washington and allowed Ukraine to hold its own against Russia.

The Pentagon is now trying to play catch-up as the U.S. prepares for a possible great-power conflict. Consider this simple cost comparison. Iran has forced the U.S. to use Patriot missiles ($4 million each) and THAAD interceptors ($12 million) to fend off swarms of $20,000-$50,000 Shahed drones, which is unsustainable in a longer conflict, especially with a foe as capable as China.

Other recent battlefield successes for the tech include Ukraine forcing Russian soldiers to surrender using only unmanned drones and robots. America lacks a robust drone industrial base compared with China, which accounts for roughly 90% of commercial drone production and controls most of the critical component supply chains. China’s DJI can make millions of reconnaissance drones per year. Skydio, the leading American drone manufacturer, can make thousands that cost three times as much. Note that Beijing is also catching up with the U.S. on more sophisticated drone technology used for both long-range strikes and spying.

Two noteworthy drone success stories: Ukraine and Taiwan. The former can produce 4.5 million drones per year, up from 5,000 in 2022 and deploy 9,000 of them per day in its fight against Russia. The latter is also ramping up output and exports, with the goal of increasing its production capacity to 180,000 units per year. Both countries have also managed to build China-free drone supply chains.

In response, Washington has launched its own Drone Dominance Program, a $1.1 billion effort with the goal of equipping the U.S. with hundreds of thousands of low-cost, weaponized drones by 2027. The Pentagon has purchased 30,000 so far after an initial competition involving 25 companies in February, ranging from start-ups to larger defense contractors like Kratos SRE and Neros. The agency is looking to buy at least 300,000 next year and start integrating them into U.S. battle plans.

More challenging than the drones will be building a reliable supply chain. The U.S. either relies on imports for key inputs, like sintered magnets (90% of which are made in China), or would struggle to scale up output at current domestic capacity. Case in point, the “brains” and “eyes” of drones depend on specialized semiconductors, like gallium-nitride power amplifiers, made at only a handful of Western facilities. The U.S. has taken some steps to address these issues, but still has a long way to go.

Don’t be surprised if Washington gets by with a little help from its friends. General Cherry, one of Ukraine’s largest drone manufacturers, recently struck a deal to build its products in the New Hampshire factories of U.S. defense contractor Wilcox Industries.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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In the past few years, something has shifted in how RIA firms talk about the future.

Selling your RIA to private equity used to be a finishing move, a reward at the end of a long and (hopefully) successful run. Today, private equity comes calling earlier and faster than some firms anticipate.

For many founders, the call is getting harder to ignore.

The numbers tell a clear story. In 2025, RIA mergers and acquisitions hit a record 466 announced deals. That's a 27% jump over the year before, and 72% of those deals were powered by private equity.

I understand the appeal. The pitch is compelling: High valuations, succession solutions, access to capital and a well-developed infrastructure.

But in my conversations with advisers across the country, I'm hearing something that doesn't make it into the press releases: Some of the advisers who sold are now asking whether it was worth it.

Private equity has played an important role in professionalizing and scaling many firms in our industry. At its best, it can help bring capital, infrastructure and strategic discipline that can accelerate growth.

Some of the most successful partnerships tend to be with firms that already have a strong organic growth engine and a clear sense of who they are.

There is a key consideration in decision-making here to frame your decision, and most people blur it when they shouldn't. Selling to private equity vs selling and becoming a W-2 employee are actually two very different economic and identity choices.

Not all liquidity events are the same — some preserve independence and amplify it. Others, over time, replace it with employment.

How ownership structure shapes independence

Private equity firms are structured to generate returns for their investors, typically within a defined time horizon. That model can bring focus, discipline and resources.

At the same time, it's worth understanding how that structure aligns with a profession built on long-term relationships and client outcomes.

In the PE partnership model, you're often helping create the next multiple. In a W-2 structure, you're typically operating inside a multiple that's already been paid for and needs to be sustained.

Growth is not an outcome — it's a habit. Whether you are independent or partnered with private equity, firms that grow consistently have one thing in common: A repeatable, disciplined approach to generating new client relationships.

For some advisers, changes to autonomy can be a meaningful consideration. According to research from Cerulli, 52% of RIAs cited loss of autonomy in operations and service as a major concern when affiliating with a PE-backed consolidator.

Around the same number were concerned about a reduction in their overall autonomy.

While firm owners may benefit from these arrangements, employees lower on the organization chart can be left without any stake at all.

Advisers and other team members who were once promised a partnership path to equity ownership have seen wages suppressed, been pressured to take on more clients than they were comfortable with and watched their path to ownership evaporate.

That's a hard thing to explain to someone who joined your firm because they believed in what you were building. That said, many firms navigate this transition successfully but it requires intentional leadership and clarity around culture, incentives and long-term vision.

The question every RIA owner should ask

In my conversations with RIA founders around the country, I consistently hear some version of this: "We want to grow, but I just don't see how we can do it without outside capital."

PE firms promise this capital, along with access to the latest technology and top talent. The question worth asking before signing is whether those resources come with strings that fundamentally change how you serve your clients and run your firm.

The most important question isn't just valuation it's: Do you still want to be an owner and operator, or are you ready to transition into a different role?

Advisers at independent firms know who they're working for and why. That clarity can change when a firm becomes part of something that's being built toward a future liquidity event.

To be fair, selling to a PE-backed firm can be the right growth strategy for some RIAs. But a key decision is whether you're transitioning into an employee role or maintaining control as an owner, and it's critical to understand the difference.

It's worth acknowledging the structural tension between a model designed for short-term returns and a profession that relies on long-term relationships.

How independent RIAs can grow

None of this means independent firms are stuck. Growth without outside ownership may have challenges, but it's very doable.

Here are four ways to approach it:

Organic growth is your superpower. Independent firms that define a clear market specialty tend to grow organically through client marketing, events and prospecting at higher rates than those who don't specialize.

Specificity fuels referrals, deepens expertise and builds a brand that's hard to replicate. That often means consistently generating a defined number of new client conversations each month and treating that pipeline as a core business discipline, not an afterthought.

Enablement without control. There are models that aim to provide capital and support while preserving independence. For example, AE Wealth Management, where I am the president, offers capital solutions that can assist advisers with future acquisitions, plus business and employee development to help toward future growth. Those are often done in the form of a minority investment.

Leverage the right partner for scale without sacrifice. Your choice of asset management platform plays a significant role in your ability to grow. The right partner should do more than manage investments; it should function as an extension of your firm.

Firms that leverage integrated platform partners such as AE Wealth Management, for example, get access to customized portfolios, alternative investment options, ready-to-implement marketing programs and back-office support, all from one team focused on your success.

Product selection is also a factor, as access to a wider range of products is a key differentiator for independent firms.

Invest in your people before someone else offers to. One of the most common exit triggers is the absence of a clear succession path for the next generation of advisers in a firm. Building internal equity tracks and leadership development programs addresses that problem before PE shows up with an offer that solves it on someone else's terms.

Use your independence as an asset. Clients notice when their adviser's firm changes hands. Many don't understand the implications of PE ownership, but they understand the question, "Who actually owns this firm, and what are their incentives?"

An independent, founder-led firm can answer that question clearly. As consolidation continues, that's becoming a genuine differentiator.

The case for staying independent

AE Wealth Management was founded by people who believe in the independent adviser model. We think independence is increasingly a signal, not just a structure. It tells clients their adviser's interests are aligned with theirs, not with a holding company's exit timeline.

The advisers who will continue to thrive in this environment have built great firms designed to last. As consolidation through outside ownership continues to reshape the landscape, that kind of staying power is becoming a differentiator clients notice and value.

The goal isn't to avoid partnership — it is to enter it from a position of strength. And regardless of the path you choose, one principle holds: Your most important KPI isn't AUM — it's whether you know where next month's clients are coming from.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

The gap between firms that have built AI workflows and those still running on legacy tools is widening.

Firms with integrated AI are doing more client work with the same staff. If you are still evaluating, you are not holding your position. You are losing ground.

Google's AI ecosystem is worth a close look because it runs on infrastructure your firm most likely already has. If you use Workspace, you already have the foundation.

The suite adds Gemini, NotebookLM, Nano Banana Pro, Veo 3, Flow, Google Vids and Whisk on top of what you already pay for. Apply any of them with structure and the returns are immediate.

Each section below covers what the tool does and where it fits in a real advisory workflow.

1. Gemini: The core engine behind Google's ecosystem

Gemini is the model powering most of Google's AI strategy. It handles text, images, voice and code, and it reasons across all of them. Google embedded it directly in Workspace, so your team can access it without leaving Gmail, Docs, Sheets, Slides or Meet.

Where it fits: Gemini handles drafting work your team already does manually: Market commentary, client letters, meeting summaries and internal memos. It also summarizes long email threads and cuts the time your team spends on administrative preparation.

The bottom line: Gemini is not a standalone product. It is an engine that strengthens the workflows your team already runs in Workspace. If you run on Google, you have it today.

2. NotebookLM: A research assistant for content-heavy firms

NotebookLM lets you upload source documents and query them conversationally. Load it with regulatory updates, investment research, compliance memos or training materials and it processes everything, so your team can ask questions and get structured answers without reading through every page.

Where it fits: Your analysts can get a summary of a 40-page regulatory update without reading it in full. Your advisors can pull client-ready talking points from research reports they do not have time to process. Your compliance team can cross-reference documents without handling each one individually.

The bottom line: NotebookLM removes the single most consistent drag on advisory productivity: The time it takes to read and synthesize large amounts of written material. If your team is buried in documents, start here.

3. Nano Banana Pro: Google's image generation and editing system

Nano Banana Pro is Google's image generation and editing model, built on Gemini 3 Pro and released in November 2025. It creates branded visuals and infographics at up to 4K resolution, with precise control over lighting, color and layout. It also renders accurate text in multiple languages directly in the image.

Where it fits: Your marketing team can produce graphics for newsletters, webinars and adviser presentations without waiting on a designer. Your advisers can build visual aids that help explain financial concepts to clients without needing a creative team behind them. If you serve international clients, the multilingual text rendering adds practical range.

The bottom line: Nano Banana Pro cuts your design cycle and your cost per piece. You spend less time waiting on outside creative resources.

4. Veo 3: Cinematic video generation for professional storytelling

Veo 3 is Google's video generation model. Feed it a script, a prompt or reference images and it produces cinematic-quality video with realistic camera motion, lighting and scene composition. The output quality is approaching commercial production standards.

Where it fits: You can use Veo 3 for quarterly market updates, conference openers and adviser-produced client communications. Your investment team can convert a complex research thesis into a two-minute video a client will actually watch, without a production crew. Your advisers can record personalized welcome videos on their own.

The bottom line: Veo 3 is for firms that want to compete on content quality without the cost of an in-house studio. The production barrier drops. The brand quality does not have to.

5. Flow: The editing and production system built for scale

Flow is Google's video editing and production platform. It does not generate video. It takes what you already have, assembles it into branded scenes, and outputs a finished cut ready for distribution.

Where it fits: Your marketing team can cut a long webinar into usable short clips in an afternoon. Your branch offices can produce adviser content to a consistent standard without rebuilding the process each time. Your operations team can turn a new policy into a training video the same day it is written.

The bottom line: Flow enforces consistency at scale. The quality of the output does not depend on who built it.

6. Google Vids: Fast script-to-video creation

Google Vids converts a script into a short video using stock footage and basic narration. It is the lightest tool in the suite and the one with the lowest barrier to entry.

Where it fits: Use it to build onboarding content and adviser training modules. It is also the right tool for policy updates and social posts where the message needs to be short and the production needs to be fast.

The bottom line: Google Vids is where to start if your team has never produced video. The learning curve is flat.

7. Whisk: A creative ideation tool for campaigns and branding

Whisk helps your team explore visual directions and campaign concepts before committing to production. It generates mood boards, color palettes and layout concepts so your team can align on creative direction before anyone spends real budget.

Where it fits: Your marketing team can use it to pressure-test visual concepts for a campaign or rebrand before spending anything on execution. It is cheap to explore and expensive to redo.

The bottom line: Whisk is a planning tool. Settle your creative direction here before you commit production budget to Veo 3 or Flow.

8. Workspace AI: The quiet productivity driver

The AI features built directly into Workspace often deliver the fastest return because they require the least disruption.

Your team can summarize meetings and write first drafts with fewer manual steps. Sheets and Slides get the same treatment. No new software. No change management program.

The bottom line: Workspace AI is where most firms should start. The lift is immediate and the barrier to entry is near zero.

Strategic recommendations for firm leaders

Getting value from these tools requires more than access. Before you deploy broadly, do these five things.

1. Start with NotebookLM or Workspace AI. Neither requires new infrastructure or a rollout plan. Both connect to content your team already produces. You will see measurable time savings within the first month. Prove the value before you expand.

2. Lock down your data controls before anything goes live. Confirm that client and firm data will not feed model training. Review your data processing agreements with Google. This is a compliance prerequisite, not a configuration detail.

3. Put a review process in writing for client-facing content. A review by an adviser, compliance or marketing is needed before anything reaches a client. Document who reviews what, and when, before the first AI-assisted piece leaves your firm.

4. Build prompt templates and a short style guide before you deploy broadly. Consistent outputs require consistent inputs. One day of preparation prevents weeks of inconsistent output.

5. Measure outcomes from day one. Track turnaround time, content volume and team member satisfaction. The data you build now is what justifies the next phase of investment.

Conclusion

Google's AI ecosystem gives your firm a direct path to better client communication at lower operating cost. These tools do not replace your advisers or your compliance process. They give your team more capacity to do the work that builds client relationships.

Your competitors are not waiting. The firms building structured AI workflows today are gaining a cost and capacity advantage that compounds every quarter. The ones that hold off will keep subsidizing the gap with margin, and eventually with clients.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.