Dolly Parton spent a lifetime turning contradictions into strengths.

She grew up with very little money yet became extraordinarily wealthy. She left the mountains of East Tennessee, yet never really left them behind. She created an image that was deliberately extravagant, while underneath the rhinestones was a remarkably disciplined businesswoman.

Her life offers a powerful lesson about wealth because she accumulated two very different kinds of it.

I define total wealth as the combination of financial wealth and wisdom wealth:

• Financial wealth includes income, investments, businesses, property and financial security.
• Wisdom wealth is harder to measure. It includes knowing yourself, understanding what matters, finding purpose, developing resilience, building meaningful relationships and having the courage to live according to your own definition of success.

Dolly Parton built an extraordinary amount of both.

Step outside your concrete box

Parton was the fourth of 12 children raised in rural Tennessee in a family with very little money. Her childhood later inspired "Coat of Many Colors," one of her most beloved songs. The coat itself had almost no financial value, but the love with which her mother made it gave it another kind of value. Its value came from relationships, love and gratitude.

That is wisdom wealth.

But being grateful for what we have does not mean accepting every limitation we inherit. I use the term "concrete box" to describe the invisible boundaries that family, circumstances, culture, fear and our own assumptions can construct around our lives.

Over time, we can become so accustomed to those walls that we stop seeing them.

Parton saw hers. The day after graduating from high school, she left for Nashville. She did not reject where she came from. She simply refused to allow her starting point to define her destination.

That may be the first lesson in building total wealth: Know where you come from, but don't let it tell you how far you can go.

Create income, but own assets

One of Parton's smartest financial decisions came long before she became a global superstar.

In the 1960s, before she had even achieved a Top 10 hit as a recording artist, she established a publishing company with her uncle Bill Owens. The decision allowed her to maintain control over the copyrights to the songs she wrote.

At a time when many famous musicians surrendered ownership of their work, Parton understood its long-term value.

Years later, Elvis Presley wanted to record her song "I Will Always Love You." It should have been a dream opportunity, until his business manager demanded half of the publishing rights.

Parton said no.

Imagine turning down Presley while you are still building your career. Yet Parton understood something every investor should understand: Income pays you today. Ownership can pay you for decades.

That decision became enormously valuable when Whitney Houston later recorded "I Will Always Love You," and the song became a worldwide phenomenon. Because Parton retained her rights as the songwriter, she participated in its enormous financial success.

Most of us will never own a music catalog, but the principle applies to everyone:

• A paycheck creates income
• Savings can purchase investments
• Investments create ownership
• Ownership, combined with time and compounding, can create financial freedom and even generational wealth

Don't only ask, "How much am I earning?" Also ask, "What am I owning?"

For many people, that can mean building ownership through diversified equities, real estate or a business. Starting early gives compounding more time to work.

Don't confuse your job with your potential

Parton also understood that one source of income does not have to define the boundaries of your economic life.

In the movie 9 to 5, she famously sang about pouring herself "a cup of ambition." She had plenty of it.

She did not remain simply a country singer. She crossed into pop music, acted in movies, wrote books, invested in businesses, licensed products and ultimately attached her name and capital to Dollywood.

Forbes valued her music catalog at about $120 million and estimated her net worth at about $450 million. Dollywood became an economic engine in the same region where she had grown up poor. A Tennessee study estimated its annual economic impact at $1.8 billion and associated it with 23,000 jobs.

There is a financial lesson here that goes beyond celebrity entrepreneurship: Diversification does not apply only to portfolios.

Your skills and career create human capital. Saving and investing can convert the income from that human capital into financial capital. With enough time and the power of compounding, your money begins working alongside you.

You do not need five businesses to follow Parton's example. You need a growth mindset and a commitment to save, invest and own.

Failure is an event, not an identity

Looking back, it might appear that Parton's extraordinary success was inevitable. It wasn't.

Projects failed. Her movie Rhinestone disappointed at the box office. A costly prime-time television show was canceled after one season. Separating professionally from Porter Wagoner resulted in an expensive legal settlement.

She kept going.

This is where wisdom wealth becomes essential to financial wealth. Investors experience bear markets. Entrepreneurs have failed ventures. Employees lose jobs. Careers stall. Retirement plans change. No financial plan can eliminate uncertainty or life's unexpected turns.

Financial wealth can give us the resources to withstand setbacks. Wisdom wealth gives us the resilience to begin again.

Sometimes wealth is the portfolio that carries you through a difficult period. Sometimes it is the mindset that prevents a difficult period from defining the rest of your life.

We need both.

Eventually, ask what money is for

Perhaps Parton's greatest investment cannot be measured on a balance sheet.

In 1995, she launched the Imagination Library, inspired partly by her father's inability to read and write. What began as an effort to provide books to children in her home county grew into an international literacy program that has distributed hundreds of millions of books.

Consider the circle her life completed:

• A girl grows up poor in Tennessee
• She steps outside her concrete box
• She turns talent into income
• She converts income into ownership
• Ownership creates financial wealth
• She uses that wealth to give millions of children opportunities that were unavailable to people she loved

That is total wealth creation.

We spend enormous amounts of time asking financial questions:

• How much should I save?
• What should I invest in?
• When can I retire?
• What return do I need?

Those questions matter. I have spent much of my professional life helping people answer them. But eventually, we should ask a bigger question: What is all this wealth for?

If money itself becomes the destination, the finish line keeps moving. There will always be someone with a larger house, a bigger portfolio or a higher net worth.

Wisdom wealth gives you the why — financial wealth provides the how

Dolly Parton understood both sides of wealth. She knew how to make money, protect ownership and build businesses. But she also knew where she came from, what mattered to her and what she wanted her success to accomplish.

She left her rural hometown to pursue her dreams, then used much of what she built to enrich the place she came from.

Perhaps that is her greatest wealth lesson: Don't simply build a bigger balance sheet. Build a bigger life.

Step outside your concrete box. Build financial wealth. Build wisdom wealth. Together, build total wealth.

Feroz Ansari, CFP®, is a portfolio manager at Compak Asset Management and an adjunct professor at the University of California, Irvine. He is the author of The Wisdom and Wealth Solution, published by Kiplinger Books and a USA Today national bestseller.

To learn more, visit wisdomandwealthsolution.com or subscribe to The Wisdom and Wealth Solution YouTube channel.

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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, business and 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…

A long and tricky to-do list awaits Congress when it reconvenes after its annual August break — the House on August 31 and the Senate on September 14. And time will be short, as lawmakers will be eager to campaign ahead of the November midterm elections.

The most pressing challenge this autumn: Averting a potential government shutdown. Failure to OK federal funding for the new fiscal year, starting October 1, would shutter many agencies.

The good news is that both the House and Senate have passed a stopgap spending bill to keep agencies operating into December. But their measures differ, and compromising won’t be easy. Still, neither party wants a shutdown before the midterm elections, and House Speaker Mike Johnson (R-LA) has hinted the Senate bill, after tweaks, should pass the House.

Voter ID legislation likely will go nowhere.
Not enough Republicans support it, despite pressure from President Trump to establish stricter rules to ensure only citizens can vote. Trump will continue to increase the pressure, but Senate Republicans opposing the move are holding firm, as are Democrats.

A college sports bill, another Trump priority, faces slightly better odds, though passage is uncertain. The bipartisan bill seeks to create a national framework for college athletic deals and would grant the NCAA an antitrust exemption so that it could enforce caps on payments to athletes, plus rules on eligibility and transfers. The Big Ten and Southeastern conferences back the bill, though some lawmakers say that the measure cedes too much power to schools over their student athletes.

Debate continues on a landmark cryptocurrency bill that would establish a regulatory framework for the industry. The bipartisan bill has gotten pushback from the banking industry, which views it as too crypto-friendly, and Democrats want stronger ethics provisions intended to curb the president’s ability to profit off his family’s thriving crypto dealings. But backers on Capitol Hill have invested a vast amount of effort on the measure and are determined to push it through.

Military funding is also in limbo, as members of both parties have pressed the administration and the Pentagon for more details on how the money will be spent, and how prior military resources have been used in the Iran war. The administration wants $1.5 trillion for the Pentagon, but Congress is unlikely to OK the full amount.

Republicans are increasingly likely to punt a massive partisan spending bill to after the midterms. Intra-GOP debates on what the reconciliation legislation should include are keeping the proposal on the back burner for now. The GOP has used the reconciliation process twice in the past year to pass bills in the Senate without Democratic support, including last year’s tax law. But this time will be trickier.

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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• Trump Tax Law 2025: What Changed and How It Affects Your Taxes
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• What Does a Government Shutdown Mean for Stocks?

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…

Facebook’s business has boomed despite serious privacy scandals and intense congressional scrutiny over the years. A recent blockbuster settlement won’t cause the company to stumble, either.

Meta, Facebook’s parent company, reached a deal with a bipartisan group of state attorneys general to end a lawsuit that alleged Meta’s social media apps, Facebook and Instagram, were designed to be addictive and harmed teens’ mental health. Meta has agreed to pay $17 billion to the states and implement a long list of new policies aimed at protecting teen users.

The new restrictions for users under age 18 include more parental controls, stronger age verification, two-hour daily time limits and blackouts from midnight to 6 a.m. But the teen protections won’t hurt Meta’s underlying business.

"It obviously is something that puts to rest a big chunk of litigation that we face in this area," said C.J. Mahoney, Chief Legal Officer, in a conference call. In terms of the business impact, Mahoney said "we feel it's going to allow us to compete well in the market."

Teen users account for less than 1% of Meta’s revenue and average about one hour per day on Instagram, far less than the new two-hour limit. Meta is also pushing for competitors TikTok and YouTube to add the new restrictions, too, which would nix any competitive disadvantage Meta faces from being the only company with them. ($5 billion of the settlement payment is contingent on TikTok and YouTube adopting the same restrictions.)

"We expect behavioral changes imposed on Meta to only marginally trim teen time spent on Meta’s properties," writes Malik Ahmed Khan, an analyst at Morningstar, in a recent research note. "The real value in teen users is their lifetime value, which is maintained in this settlement."

Plus, Meta avoids legal penalties that could have been far higher. "The settlement would lift a large legal overhang on Meta’s stock, with prior reports of legal liabilities materially higher than the proposed $17 billion," according to Khan.

Going forward, future lawsuits and potential federal regulations are unlikely to take a major bite out of Meta’s sales and profits. But other pressing risks linger. Reaching a healthy return on investment for Meta’s exorbitant spending on artificial intelligence will be incredibly tough. Competition from TikTok, YouTube and other media apps is getting more intense. And CEO Mark Zuckerberg’s vision of turning the company into a hub of personal superintelligence is a major bet with unclear prospects.

Meanwhile, advocates continue to push for more guardrails. The next fight will be over how teens use AI, as the settlement does not cover Meta AI, the company’s chatbot.

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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When you budget for an AI tool, you budget for the bill the vendor sends. That bill is the visible part of the cost. It is also the smaller part.

The expenses that decide whether AI pays off for your firm never appear on the vendor's invoice at all, and most firms do not budget for them until they arrive.

This is the part of AI economics that catches finance leaders off guard. The token cost is the tip. The real cost sits below the surface, and it is made of your people's time and your firm's regulatory exposure.

The cost of review

Every piece of AI output that reaches a client must be checked by a human first. This is not optional for a fiduciary. You cannot send an AI-drafted client communication, an AI-generated summary or an AI-assisted recommendation to the people who trust your firm with their money without a qualified person reviewing it.

The technology does not change the standard of care. It changes who does the first draft.

That review is a labor cost, and it scales with how much AI you use. The more your advisers generate, the more there is to check. A firm that measures only the token bill sees AI getting cheaper per task while the review burden quietly grows.

If you do not budget the review time, you have not budgeted the tool. You have budgeted half of it.

The cost of training

A tool your staff cannot use well is a tool you are overpaying for. I see this all the time with firms that roll out Microsoft Copilot without any training around how to use the tool and get the most out of it. These firms quickly find the costs without the benefits.

Getting real value out of AI requires teaching your people how to prompt it and how to judge what comes back, including when to distrust it. That training takes time, it takes a person to deliver it, and it repeats every time the tool changes or a new hire arrives.

This cost is easy to skip and expensive to skip. Untrained staff produce worse results from the same tool, which makes the AI tool look like a poor investment when the real problem is the absence of training. The token bill is more expensive when your people use the tool badly, reducing your return on the investment.

The cost of governance

This is the line that protects the firm, and it is the one most likely to be missing from the budget.

Using AI responsibly in a regulated business requires an acceptable-use policy that classifies which tools are approved and which data may be processed. It requires vendor due diligence documentation for every tool that touches client data, mapped against your regulatory obligations.

It requires updated supervisory procedures showing how AI-assisted work is reviewed before it reaches a client. It also requires a training record an examiner can inspect.

None of that builds itself. Each piece takes time from compliance and operations staff, and it must be maintained as the tools and the rules change. The off-channel communications enforcement wave taught the industry an expensive lesson about applying existing rules to new technology after the fact.

AI governance is the same lesson waiting to be learned again. The firm that funds the tool but not the governance around it is buying the upside and leaving the downside unbudgeted.

Why ownership decides the outcome

These costs fall across three parts of your firm. The token bill belongs to technology. The review burden belongs to the leadership team. The governance work belongs to compliance. When one of those groups owns the AI budget alone, the costs that live in the other two go unfunded.

Research on AI return makes this concrete. According to the Mavvrik report AI Cost Statistics 2026: Forecasting, ROI, and Budget Risk, firms where technology teams own AI spend by themselves capture less value than firms where finance and compliance share the decision. The reason is exactly this fragmentation.

A technology-only budget sees the invoice and misses the iceberg. A shared budget sees the whole cost, funds it correctly and gets a real answer about whether the tool is worth it.

How to budget the whole cost

Start by writing down every cost a single AI workflow creates, not just the one the vendor charges for. Put the token estimate at the top. Then add the hours of review the output will require, the training to get staff using it well and the compliance work to govern it.

That full number is the real cost of the tool. It is the only number that tells you whether the investment returns anything.

I want to point out that this cost will always be less than a human cost, but it should be clearly measured.

Then assign each cost to the group that incurs it and bring those groups into one budget conversation. The token line is a technology decision. The rest is not.

The firm that budgets the whole iceberg will know what its AI use costs and whether it pays dividends on the investment.

The firm that budgets only the tip will be surprised twice, once by the hidden costs and again by the return that never materialized because the tool was never properly supported.

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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…

Wondering if a piece of writing was generated by artificial intelligence? Anthropic has a solution: Watermarks.

But the company’s recent update is not based on market demands or innovation. It stems from the European Union’s Artificial Intelligence Act. The strict rules prohibit all sorts of conduct and come with a slew of new requirements for AI deemed high-risk. Rules for "high-risk" AI went into effect this month.

Prohibitions on AI systems include "deploying subliminal, manipulative, or deceptive techniques to distort behavior and impair informed decision-making, causing significant harm." AI systems also can’t "[infer] emotions in workplaces or educational institutions, except for medical or safety reasons." And much more.

The EU AI Act’s most severe penalties are fines of up to 7% of global revenue for companies found in violation. It’s sure to make the EU a tougher place for American AI companies to do business. But the impact will be global, as seen by Anthropic rolling out watermarks in all countries, noting that the change is related to the law’s transparency requirements.

Anthropic has detailed how watermarks work, adopting a method developed and already used by Google. The process involves how the AI model chooses specific words and word fragments within the text. Anthropic has a key that involves two lists of words and the text generated must include enough of the words from one list to be statistically significant. The method has limitations, such as not working well on shorter passages and only revealing the "likelihood" of being written by AI.

"Because the watermark is part of the text, it will travel with the text when it’s copied and pasted elsewhere, and may persist through some editing," according to Anthropic. "Watermarking will be applied at the model level, which means it will be present no matter which Claude product or surface the text comes from."

If it’s working well, readers should not notice. "You won’t see it, and it doesn’t change the meaning, quality, or readability of Claude’s response," according to the company. Theoretically, watermarks could help identify AI-generated text anywhere. But the move is likely to stir up concerns about Anthropic’s power over users’ text output and what it means for intellectual property.

Expect Anthropic’s adoption of watermarks to ignite more pushback from the Trump administration, with concerns about thwarting tech innovation and harming U.S. tech giants. President Trump said last month the administration will conduct a formal review to retaliate against the EU’s "discriminatory" digital practices, stemming from another EU digital law that has led to huge fines against U.S. tech giants. The growing backlash will also focus more attention on Google’s use of text watermarks for its AI model Gemini.

With the EU’s AI Act gradually coming into full force and American AI giants working to comply, the U.S. relationship with Europe is only set to get more tense.

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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When you recognize the need to add services to better support your clients' retirement strategies, one major roadblock often stands in the way: Your sales process.

Change doesn't have to mean overhauling your entire process. Minor adjustments — such as refining your annual strategy session or annual review — may be the ideal opportunity to explore a new service.

Something as simple as adding two additional questions to your strategy session or looking for small openings in your current process to dive deeper could make the difference in addressing your clients' needs and improving their retirement strategies.

Our team recently worked with multiple offices and identified three key opportunities for advisers to make small adjustments to the sales process that can have a large impact on your clients' planning.

Opportunity No. 1: From reviews to strategy sessions

A small mindset change can lead to a completely different conversation in what's often referred to as the annual review.

By calling this meeting a "strategy session" instead, you set an expectation with the client that you are actively reviewing their current approach with the intent to make purposeful adjustments for their benefit.

Examples may include discussing long-term care options, reviewing unused income riders to convert for legacy planning or simply revisiting their current strategy to help ensure it still meets their needs.

This approach doesn't add more meetings or appointments — rather, the same meeting with a few extra minutes of conversation could uncover more of the client's needs or wishes.

And the best part: A mindset change doesn't cost you anything!

Opportunity No. 2: The first 100 days

One adviser I work with has perfected the concept of the 100-day mark. When a new client reaches their 100th day with the office, the adviser schedules a milestone planning meeting.

In this meeting, they cover topics such as tax strategies, Medicare and life insurance — and they present a long-term care option to every client. This is a great time to have these conversations now that money transfers are complete, the client relationship has been established, and one of the biggest fears — income in retirement — has been addressed.

At this 100-day mark, the client has given your firm more time and greater trust to turn over more of their financial situation. They are also still new to the process and open to additional suggestions on how to help better protect their retirement future.

Opportunity No. 3: Find openings

Enhancing your sales process doesn't mean starting over. Taking a deep dive into your current process and finding small openings to add an extra question or tweak a current process can create new protection opportunities and revenue lines.

At a recent training event, one team laid out their three-bucket sales process. They realized that by simply adding a long-term care conversation to their "tomorrow" planning bucket, they can help protect their clients if they experience a future long-term care event.

This not only helps provide the client with some assurance but also prevents the depletion of other portfolio investments should they need care.

Challenge yourself and your team to look at your current process. Where is an opening to have a long-term care conversation?

When reviewing their policies, don't just look at performance — look for opportunities, unused income riders, old annuities that are not performing as well as current products or life events that have created new concerns, such as the need to provide future safeguards for their grandchildren.

Small adjustments, big results

Doing what's best for our clients sometimes requires us to evolve, but that change doesn't have to be a complete overhaul. Small steps can have big impacts, especially when they positively affect retirement outcomes.

If you can take two extra steps today to help mitigate risks to your clients' future, wouldn't you do that?

By proactively identifying these touchpoints and guiding your clients through these essential conversations, you not only demonstrate exceptional value but also open doors to new planning opportunities.

These efforts can lead to meaningful revenue growth for your firm through strengthened client loyalty, increased referrals and the implementation of insurance strategies that truly address your clients' needs.

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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 I speak with financial advisers about artificial intelligence, I often hear the same concern. Many are worried that AI will eventually replace them.

I understand the fear, as it seems that every major new artificial intelligence technology comes with predictions that this time the profession is finished. The headlines are certainly not helping, as every week there seems to be another article explaining how AI can build portfolios, answer financial questions, analyze investments or generate financial plans in seconds.

For many advisers, it may feel as if AI is attacking the very value of the practice they have spent years building.

I think that perspective misses what is actually happening.

The clients using AI are not trying to replace their advisers.

They are simply trying to become better clients.

And that distinction may be one of the most important aspects for a financial adviser to understand, and when they do, I believe it will shed a new and exciting light on the future of our noble profession.

The empowered client

For decades, many clients walked into meetings feeling overwhelmed. For your clients, financial planning can be intimidating, which is exactly why they want to work with you.

Investment terminology can feel like a foreign language. Tax code, retirement income strategies, estate planning techniques and risk management concepts are not subjects most people spend their weekends studying.

As a result, many clients sat quietly through meetings, nodded politely and left without fully understanding what had just been discussed or what action they took in their portfolios.

AI is changing this.

Clients are becoming empowered through AI and can now ask questions whenever they want. They can learn the basics of Roth conversions, Social Security strategies, charitable planning, annuities, investment management and countless other topics within minutes, but here is the key: They arrive at meetings empowered and with more information than ever before.

They no longer have to sit there and nod politely as you explain why you believe duration risk needs to be accounted for in this market, without a clue about what "duration" means.

Many advisers see this as a threat, but I see it as an opportunity because an informed client is often a more engaged client, and a more engaged client asks better questions, which leads to deeper conversations.

These deeper conversations create stronger relationships.

The adviser who embraces this rather than fights it may find that AI does not weaken the client relationship but may actually strengthen it.

The emergence of the 'confidently wrong' investor

Of course, there is an important caveat.

More information does not always create a better understanding.

AI can not only help your client feel more empowered, but it may also create a uniquely new AI-driven challenge: The confidently wrong investor.

That may become one of the most important issues for financial advisers in the next decade.

AI is trained to sound authoritative, but it is not trained to always be correct.

AI hallucinates more often than people realize. It can confidently invent IRS rules, estate planning strategies, tax interpretations and legal concepts that simply do not exist.

Sometimes it pulls from outdated information. Other times it blends accurate information with misinformation in ways that sound incredibly believable.

The important thing to understand is that AI does not feel embarrassment the way you or I would if we confidently gave somebody the wrong answer over coffee. It does not pause and think that it should double-check things. It simply delivers information with remarkable confidence, whether the answer is accurate or completely wrong.

That changes the adviser's role, as I believe the future adviser becomes something very different.

The rise of the 'Epistemic Adviser'

That is why I think advisers who fight AI are making huge mistakes. The future adviser is no longer the person hoarding information. The future adviser is the person helping clients navigate information.

That is a much more meaningful role.

I call this role the Epistemic Adviser.

Now, I realize that sounds like something a philosophy professor would say, but the idea itself is simple. An epistemic adviser is somebody who evaluates the quality of knowledge before a client acts on it.

Who said my liberal arts degree was useless?

An Epistemic Adviser is a knowledge quality inspector. Your role is no longer simply delivering information, but it is now evaluating its quality before a client acts on it.

That is a very different profession.

And here is the key: You will use AI to become the Epistemic Adviser!

You encourage your client to use AI if they want to. You will both use AI in a manner compliant with your firm. Both AIs will recommend a Roth conversion, but you are the one who knows the human side of the client, and getting her to write a $182,000 check to the IRS is something she will never do.

Both AI recommendations were for a gifting program for estate tax purposes, but the client forgot to tell the AI that she lives in Illinois, which has one of the most complicated state estate taxes I have ever seen.

Are you starting to see my point?

Both you and your client are both using AI, but you, as the Epistemic Adviser, are essential to sort it out.

The difference between knowledge and judgment

This is where advisers become more valuable, not less.

You see, you are not competing with AI. You are helping clients navigate it and think about what they are really asking for.

With the endless supply of information, they are not asking for more information. They are seeking confidence that they are making the right decisions and in the right context.

They are asking for judgment.

They are asking for someone who understands how financial decisions interact with real life.

AI may recommend delaying Social Security benefits, but it is the adviser who understands the client's health concerns.

AI may recommend a gifting strategy, but it is the adviser who understands family dynamics and state-specific considerations.

You see, the difference is not information.

The difference is judgment.

Closing thoughts

As we move forward, I believe advisers should stop viewing AI as something happening to them and start seeing it as something they can use alongside their clients.

If the client is so inclined, encourage them to bring AI-generated ideas into meetings.

• Discuss those ideas openly
• Explore them together while validating what is useful
• Explain what may be missing and help them understand not only the answer but also the reasoning behind it

Clients are not looking for replacement.

They are looking for empowerment.

And advisers who help create that empowerment may find themselves more valuable than ever in a world where information is everywhere, but wisdom remains remarkably scarce.

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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.

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SpaceX is going big with Terafab, which it says will be the largest chip-making plant in the world when completed. But it’s hard to know if Elon Musk’s extraordinarily ambitious semiconductor plans will work.

One thing is certain: Musk is serious about building it. SpaceX is dedicating nearly $17 billion for the initial phase of the advanced semiconductor manufacturing factory, and tens of billions more in spending is likely. When finished, the company says Terafab will span 100 million square feet, making it one of the largest manufacturing facilities in the world.

Within Terafab’s walls, SpaceX will manufacture, package and test advanced logic and memory chips. The reason for entering the market is based on Musk’s sky-high forecast of the chips needed for driverless cars, humanoid robots and orbital data centers for both SpaceX and Tesla.

SpaceX says its demand for chips will eventually be so astronomical — more than the current global supply — that it can’t rely on leading chipmaker Taiwan Semiconductor Manufacturing Co. for all its needs. Or Intel, which is working overtime to start a division that makes chips for outside companies, and which has partnered with SpaceX to help build Terafab.

"Elon has a proven track record of reimagining entire industries," said Intel’s CEO Lip-Bu Tan when the partnership was announced. "This is exactly what is needed in semiconductor manufacturing today."

Will chipmaking be reimagined by the world’s most dominant space company? The answer is unclear, but here are some of the early questions we’re pondering.

1. Can SpaceX build a successful semiconductor fabrication plant?

Semiconductor manufacturing is incredibly costly and challenging. It pushes the limits of physics, chemistry and engineering. The clean rooms are up to 1,000 times cleaner than an operating room. The lithography machines needed to print chip patterns on silicon wafers cost hundreds of millions of dollars. There are specialty gases and chemicals, along with all sorts of automated machinery. The ecosystem involves thousands of suppliers around the globe.

And the economics don’t work unless the facility is running at full capacity, churning out finished wafers with a miniscule amount of defective chips. To add to the challenge, SpaceX wants to push the limits of current chip manufacturing, saying it will be the first to do so many of the processes under one roof. "The most epic chip-building effort in the world," says the company.

Musk says that eventually, a huge production volume will allow Terafab to test and develop new chip designs rapidly, calling the way current chipmakers operate "extremely conservative." He also wants to harness new physics and chip technologies, saying in a presentation, "We’re going to try a bunch of wild and crazy things."

2. How will Terafab distort the chip ecosystem?

SpaceX will become another big spender on chip equipment. The company needs advanced photolithography machinery from Dutch company ASML, pitting it against TSMC, Intel, Samsung and others. Plus, it will need to buy all sorts of other gear that goes into a leading-edge chip plant from Lam Research, Tokyo Electron, KLA Corporation and many other suppliers. Building a cutting-edge chip plant can already cost more than $30 billion and Terafab, with its scale and ambition, will cost far more.

SpaceX is also likely to poach top chip talent from other top companies. The U.S. chip sector already has a severe shortage of workers to operate chip plants. The massive project will take up lots of skilled construction labor as TSMC, Intel, Samsung and chip companies try to expand in the U.S. Over the long term, there’s the question of whether Terafab’s chip production could affect the sales of other chip leaders.

Musk’s viewpoint is that there will be an ongoing, huge shortage of chips compared with the exploding demand for AI compute. SpaceX says Terafab chips are solely for its own internal use, but one has to wonder if the company would ever consider selling its chips to outside customers. Or even making chips for customers. Plus, if SpaceX can eventually win more AI market share, that affects the chip market. Its AI competitors would need to buy fewer chips.

3. What kind of turmoil will SpaceX cause for chip stocks?

In the coming years, some investors may start monitoring SpaceX’s competitive threat to other chipmakers or even start worrying about a potential glut of chips. SpaceX wants other chipmakers to expand production as it makes plans to wean itself off outside chips. "While we are deeply appreciative of our current chip suppliers, and encourage them to expand production whenever possible, this looming gulf between supply and demand is at the core of Terafab’s necessity," according to the company’s latest update.

It wouldn’t take SpaceX completing the project or even making chips in high volumes to affect other chip stocks. Hitting early milestones or even building a promising narrative around Terafab could spark stock gyrations. Intel’s partnership with Terafab could become an uncomfortable one in years to come if SpaceX starts to be a competitive threat. Consider that SpaceX’s long-term plans for Starlink to take on terrestrial wireless carriers have already hit telecom stocks, causing U.S. wireless carriers and tower firms to trade lower.

4. What does this mean for Nvidia?

Over the short term, not much. But SpaceX takes the long view, and that’s where things get interesting. As SpaceX pursues manufacturing its own chip designs, it could mean trying to move past Nvidia, at least in the very long term. For now, SpaceX is all-in on Nvidia chips, recently committing to the company’s AI chips for its orbital data centers. "We have decided to build exclusively on Nvidia, because we think the Vera Rubin architecture is the best architecture," Musk said during SpaceX's recent earnings call.

But over time, that relationship could get challenged if SpaceX somehow is able to make its own chips and become a dominant force in AI data centers, on Earth and in space. SpaceX’s investor prospectus underscored how it wants to keep all options on the table: "While Terafab is intended to expand our internal chip manufacturing capabilities and alleviate potential future AI chip shortages at SpaceX, particularly as we pursue orbital AI at scale, we expect to continue sourcing a significant portion of our compute hardware from third-party suppliers."

What is the timeline for Terafab?

While the initial construction has started, the time it will take to produce viable chips is anyone’s guess. And there’s a difference between just making chips and producing them economically at scale. It’s likely that SpaceX faces all sorts of technical challenges in coming years.

Here are some of the key dates up to today: SpaceX announced in March 2026 that it was building Terafab in collaboration with Tesla. The partnership with Intel was announced in April 2026, which will include Intel lending its manufacturing expertise to help with design, fabrication and packaging. The latest announcement about breaking ground on Terafab in Grimes County, Texas, happened on August 6 and included an aerial shot of the futuristic-looking facility.

Other development timelines, milestones and spending haven’t been determined yet (or at least are not public). It’s likely SpaceX moves aggressively on this project and the timeline for initial production is faster than other chip plants built in the U.S. However, completing the full vision of Terafab would take many years, extending well into the 2030s.

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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Business Outlook: Economic impacts

To help plan budgets for 2027 amid lots of uncertainty, here’s our take on where a range of key costs are headed.

The U.S. economy will grow moderately next year. Expect 2.2% GDP growth, versus 2.1% growth in 2026. A recession isn’t happening, unless oil tanker traffic in the Persian Gulf stays blocked for many more months. The Federal Reserve will raise its short-term interest rate from 3.5% to 4.0% between October 2026 and the end of 2027. Chairman Kevin Warsh will want to cut rates a bit in 2027, but it’s unclear if other Fed members will agree.

• Short-term consumer lending and interest on CDs will edge up with rate hikes.
• Auto loans will continue at about 7% on new cars.
• Home equity lines of credit will be about 7.25%.
• The 10-year Treasury note will fluctuate around 4.5%, the same as in 2026.
• 30-year mortgage rates will stay bouncing around 6.5%.

Brace for another year of stubbornly high inflation, only getting down to 3.0% by the end of 2027, after registering 3.6% at the end of this year.

Corporate profits are poised to jump 17% for large companies, a bit less than the 25% rise in 2026. Double-digit earnings growth is likely for most industries, except consumer staples, materials and real estate. Energy-sector profits will decline. Wages/salaries will be up 3.0%, after 2026’s 3.0% rise. Total benefit compensation will rise 4.0%, similar to 2026, boosted by a 6.7% rise in health insurance premiums per employee, up from 6.0% in 2026. Prescription drug costs will be up 3-4%, depending on the type. Companies will try to control weight-loss drug spending.

Business Outlook: Energy costs

Energy prices in 2027 depend heavily on the Middle East situation calming. Assuming it does, oil and the fuels made from it should decline modestly next year. Prior to the Iran war, global oil markets were well-supplied. Production was threatening to outrun demand growth. If oil shipments from the Persian Gulf can get back to near normal, abundant supplies should again push down prices.

Figure on gasoline averaging $3.25-$3.50 per gallon (for regular-grade)… more than the $3.10 average from 2025, but less than the $3.70 so far this year. Diesel should also slip, but not by as much as gas. Global diesel supplies are expected to remain tight due to constrained refinery capacity. After averaging $3.66 per gallon in 2025 and $4.75 so far this year, budget for $4.25-$4.50 in 2027.

Natural gas prices seem bound to rise next year after this year’s drop took the benchmark gas futures contract to $2.64 per million British thermal units in recent trading. Much of the world is short of natural gas, but the U.S. has plenty and can export only so much to overseas markets. That has weighed on prices here. But the combination of soaring U.S. power usage and tight supplies abroad should give U.S. natural gas prices a lift. How much depends heavily on factors like next year’s weather, which can’t be known now. But to be safe, price in a rise of 5% vs. what you currently pay for natural gas to account for rising consumption.

Another year of painful electric cost increases lies ahead, as soaring usage outruns utilities’ ability to keep pace. Commercial and industrial power customers should pencil in 6-7% higher rates, similar to the increases they are seeing this year. Residential customers can expect even steeper increases vs. their current rates.

Business Outlook: Payroll costs

We see payroll taxes rising, as the Social Security wage base goes to about $190,200. For firms that pay pension premiums to the Pension Benefit Guaranty Corporation, no change in rates for 2027. The exception is inflation-related indexing for flat-rate premiums, which will hover around $115 per plan participant in 2027. Variable-rate premiums for underfunded pension plans will be $52 per $1,000 of unfunded vested benefits (subject to a $781 or so per-participant ceiling).

Business Outlook: Insurance costs

A mixed bag for insurance.

Rates for commercial property insurance figure to decline for well-managed, low-hazard properties. Facilities that are exposed to natural catastrophes face increases of up to 5%. For policies with recent losses expect increases of up to 10%.

Primary general liability and umbrella or excess liability will rise between 5% and 20%.

For cyber insurance, rate declines or coverage enhancements at no cost can be obtained by companies with robust security controls in place. For those with recent claims or elevated threat profiles the rate increases up to 10%.

Rates for directors and officers insurance: Public companies should see a rate drop of up to 5%, while rates for private firms and nonprofits will be flat to up to 5% higher. Hourly rates paid to law firms, up around 6-7%, about the same as in 2026. Accounting fees for a typical business rising by 5-8%. As routine work gets automated, there’s a shift from hourly billing to fixed-fee and other pricing.

Business Outlook: Travel and transportation costs

Airfares will be up slightly, versus this year’s sharp increase. However, war-induced jet fuel price hikes, aircraft shortages, labor expenses and other factors could push up prices. Note that airlines are cutting flights and routes to cut costs.

Hotel room rates, up just a bit, about 1.5% more than in 2026 in the U.S. Globally, rates will inch up more. Group rates aren’t expected to increase much, but ancillary costs for hotel meetings and conferences are likely to cost more.

Car rental rates, flat. At most, costs could be 1% higher than this year. But there could be fewer vehicle options, and don’t expect to find many bargains.

Only a bit of relief is on tap for shipping costs. Truck spot shipping rates (excluding fuel charges) will decline 7% during 2027. After the 41% rise this year, that still puts them 31% higher than in 2025. Contract rates that rose 27% in 2026 will rise a further 6% to mid-2027, then level off. For the peak season next year, ocean shipping rates will likely be less, if the Persian Gulf situation stays stable. Overcapacity will likely become a problem again, depressing rates. Air cargo rates will remain high, but will return partway to pre-Iran war rates as fuel costs decline.

Business Outlook: Property costs

Prime office rent, up 3-5%, while nonprime properties are flat or lower. Retail space, up 3-4% for asking rents, as a scarcity of supply continues. Warehouse rents will pick up 2% to 4%, as demand remains firm.

Business Outlook: Technology costs

Brace for higher tech hardware costs, as costlier memory and components continue to boost prices of smartphones, PCs, tablets, etc.

Apple is set to raise prices on new iPhones by up to hundreds of dollars this fall. Device prices will be up 10% or more from other vendors, too.

Buy IT this year or early next year, if you can. Expect fewer deals on wireless service as competition cools a bit. Carriers are still battling it out, so keep an eye out for new plans and money-saving bundles. Ditto for wired broadband, where premium high-speed plans could cost a bit more.

The very best artificial intelligence services will cost more, such as Anthropic and OpenAI. But other AI models from xAI and Meta will offer cheaper plan options.

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 and make the most of your investments and money. Subscribe to The Kiplinger Letter.

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Minority-owned businesses are one of the fastest-growing segments of the U.S. economy.

The U.S. Census Bureau puts the number at an estimated 1.3 million.

And according to the 2024 Minority Businesses Economic Impact Report, they generate nearly $600 billion in annual economic output while posting year-over-year gains in production, employment and wages.

Yet for many founders, the greatest challenge comes after building the business, when it's time to sell. As research from Brookings Metro highlights, minority-owned businesses face unequal access to capital.

When that's coupled with unequal access to experienced advisers and sophisticated legal and financial resources, it means many otherwise successful businesses reach the sale process without the documentation, governance or operational infrastructure buyers expect.

The result can be lower valuations, prolonged negotiations or deals that never make it to the closing table.

With thoughtful planning and preparation, however, founders can address many of the common obstacles before a buyer even begins due diligence, positioning themselves to protect the value they've spent years creating.

Assess your business

A U.S. Department of Commerce study found that minority-owned firms are more likely to be denied loans, pay higher interest rates when they do secure financing and are less likely to apply for credit because they expect to be turned away.

Minority-owned companies typically have fewer banking relationships and collateral options than their non-minority counterparts.

These barriers do not disappear at the point of sale. They can affect how a business is valued, how a deal is structured and who shows up at the negotiating table.

For any business owner, preparing for a sale may be the first time they have navigated a transaction of such a size and complexity. Compounding the overwhelm for many minority founders is the fact that not all business owners have equal access to the legal, financial and advisory networks that help companies prepare for an eventual exit.

As a result, some business owners enter the sale process without fully appreciating the level of scrutiny buyers will apply to their records, contracts, compliance practices and financial reporting.

One of the most important things a business owner can do before pursuing a sale is conduct a thorough internal audit. While many owners focus on financial performance, buyers go beyond revenue and profitability. They want reassurance that the business is well organized, compliant and free of surprises that could delay or derail a transaction.

Where to start

Start with your corporate records. Formation documents, operating agreements, bylaws, shareholder agreements, capitalization tables and board records should be complete, accurate and readily accessible.

Buyers will also examine customer and vendor contracts, loan agreements, liens and property leases.

Next, review legal and regulatory risks. Pending litigation, environmental matters, product liability claims, recalls and other compliance issues should be identified early.

Financial statements and tax returns for at least the previous four years should be organized, prepared in accordance with generally accepted accounting principles where possible, and reviewed or audited by a reputable CPA.

Intellectual property is another critical area. Trade secrets, trademarks, patents, copyrights and related registrations should be documented, along with confidentiality agreements for employees, contractors and third parties.

Businesses should also confirm compliance with applicable data privacy laws.

On the employment side, verify worker classifications, ensure I-9 documentation is complete, identify any pending employment claims and review employee benefit plans for legal compliance.

Finally, organize information on your key customer and vendor relationships, including revenue concentrations over the past 12 months. Any transactions involving affiliated entities or related parties should also be clearly documented.

The goal is to identify and resolve issues before a buyer discovers them. The more organized and transparent your business appears during due diligence, the more likely the transaction is to proceed efficiently and on favorable terms.

Close the gaps before a buyer finds them

Once you've completed your internal audit, expect to find gaps. Nearly every business does. The difference between a smooth transaction and a difficult one often comes down to whether those issues are addressed before the company goes to market.

Buyers are trained to identify risk. When they uncover missing documentation, unresolved compliance issues or operational weaknesses during diligence, those findings frequently become negotiating leverage.

What might seem like an administrative oversight can quickly translate into a lower purchase price, additional indemnification obligations or delays in closing.

Corporate records should be brought up to date, whether that means preparing written shareholder and/or director consents to ratify corporate actions or correcting deficiencies in stock issuances.

Outstanding liens that should have been released should be formally terminated, and any informal arrangements between related parties should be documented through written agreements.

Financial records deserve the same attention. Incomplete or inaccurate financial statements should be reviewed and corrected with the assistance of a qualified CPA. Intellectual property should be evaluated to determine whether trademarks, patents, copyrights or trade secrets require additional protection.

Businesses that rely on proprietary information should ensure employees and contractors have executed appropriate confidentiality and invention assignment agreements.

Ultimately, buyers use diligence to assess both risk and value. Companies that present organized records, documented processes and resolved compliance issues signal that the business is well managed and ready for transition.

That preparation can help support valuation, accelerate the transaction process and reduce the likelihood of post-closing disputes or liability.

Start building your team 12 to 24 months out

Minority-owned businesses face challenges that stem from systemic discrimination. That is one of the reasons why it is essential to assemble your team of trusted professional advisers 12 to 24 months before you plan to go to market.

Your attorneys, accountants, financial advisers and investment bankers will work together to help you address gaps, position the business and its owners favorably and work through some of these structural obstacles.

Beyond your professional team, lean into community networks. Minority business organizations, industry events and peer groups can provide introductions to potential buyers, capital sources and strategic partners that may not be visible through traditional channels.

Consider seeking investors focused on diversity or exploring alternative funding sources, such as SBA programs and crowdfunding platforms.

A stronger top line and a more diversified customer base make a business more attractive to buyers. If you have not already, consider applying for minority business certification, which can qualify your company for certain government and corporate contracts and add another proof point for prospective acquirers.

Preparation is what separates a closed deal from a missed opportunity

The minority business community is building something remarkable. The growth numbers are real, the economic impact is significant and the entrepreneurial ambition behind these companies is clear.

However, too many founders leave value on the table because they did not prepare for the exit with the same rigor they brought to building the business.

Clean documentation, clear organizational structure, resolved compliance issues and a strong advisory team are what separate a deal that closes at full value from one that falls apart in due diligence.

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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 few months ago, I got a call from a dentist who had been working as an employee for three years.

She was making close to $200,000 a year, had no major complaints about her job and wanted my professional opinion on a crossroads: Should she buy a practice now, or wait a few years until she felt more confident running a small business?

I asked her a different question first. What does waiting cost you?

She didn't know. Almost nobody does, because almost nobody runs the math before they decide to wait. When smart professionals think about buying a business, they evaluate the decision entirely in terms of visible risk:

• The debt
• The staffing responsibilities
• The fear of something going sideways

What gets left out of that calculation is the compounding cost of staying put.

I work exclusively with buyers on the acquisition side of dental practice transitions. My team has advised on more than 1,500 deals across 49 states, and the most expensive mistake I see isn't a bad purchase.

It's a highly capable, well-qualified buyer who waits years longer than the financial numbers support, because waiting feels like the responsible choice.

It isn't.

What the delay costs

The American Dental Association's Health Policy Institute tracks net income for dentists who own their practices vs those who work as employees. Practice owners netted an average of $217,781 in 2024. Associates netted $160,891. That's an annual income gap of roughly $57,000, and it has held steady for years.

To see how that plays out over a career, picture three professionals who start practicing at age 36 and retire at age 65:

• The early buyer buys a practice at 38
• The hesitant buyer waits five years and buys at 43
• The career employee stays an associate for the entire 29-year career

When you model realistic income progressions, business equity and tax structures, the outcomes look very different. By retirement, the early buyer accumulates roughly $10.8 million in cumulative career earnings. The hesitant buyer accumulates $9.7 million. The career employee finishes around $6 million.

That's a $1.1 million penalty for a five-year delay, and a $4.8 million gap between buying early and never buying at all. Every year a capable buyer waits is a year of wealth compounding they can't recover.

The number most people miss in this calculation is the financial inflection point. A business owner's income jumps sharply once the initial acquisition loan is paid off.

The dentist who bought at 38 hits that milestone at 48. The one who waited until 43 doesn't get there until 53. Those extra five years, spent at a lower income level while carrying acquisition debt later in life, are where most of the seven-figure gap comes from.

It's not one bad year. It's a decade of smaller numbers that never have the time to catch up.

Why capable people still wait

The professionals I advise aren't reckless. If anything, they're the opposite. Clinical fields attract people who are cautious, detail-oriented and trained to avoid mistakes. That instinct produces excellent patient care, but it works against the same people at the negotiating table.

The hesitation I hear most often isn't about money. It's about competence.

• Will I know how to manage payroll?
• Will the staff quit on me?
• Will I make a leadership mistake I can't undo?

These are fair questions, but buyers routinely overstate the real operational risk. When my firm tracked patient retention across hundreds of transitions, the data showed that the average practice gains 4.1% more patients in the six months after a sale than it loses. The fear tends to be larger than the reality.

Student debt makes the hesitation worse, not better. Many young professionals graduate with $300,000 or more in loans and assume the safer move is to hold on to a steady paycheck until that balance feels more manageable. It's an understandable reaction, but the math runs the other way.

Ownership income is almost always the fastest path to paying down that debt, because a $57,000 annual income gap closes a six-figure loan significantly faster than a flat employee salary ever will.

A framework for anyone weighing this decision

The issues at play here aren't unique to dentistry. Any licensed professional who could own the practice they currently work in, whether that's a veterinarian, an optometrist or a physician in private practice, is working through a version of the same math.

Before deciding to wait another year, three considerations are worth addressing honestly:

What is the actual income gap in your field between owners and employees?

Do not estimate. Most professional associations publish this data the way the ADA does for dentistry. Find the real number.

What does that gap cost you over the years you consider waiting?

Multiply the annual income difference by the number of years you're thinking about delaying, then add a conservative estimate of the equity you would build in a business purchased today.

The number is almost always larger than people expect. Remember, too, that skills and experience compound just as the numbers do.

Separate the fears that are about your own competence from the fears that are about the specific deal in front of you.

Competence fears are solvable.

With the right accountant, attorney and an adviser who works only for you (not the seller), most people learn the business side faster than they think.

Deal fears, such as a practice with declining revenue or a lease with serious problems, are worth taking seriously and leaving behind.

Take heart that at this very moment, within a few miles of you, there is an owner-professional of the business you're considering buying who is operating a level below what you'd consider "competent" — and they're not going bankrupt.

The professionals who build strong lifetime wealth aren't the ones who eliminate every uncertainty before buying. They are the ones who run the numbers, build an unconflicted team around them and move when the math says they are ready.

The question is not whether you feel ready. It is what another year of waiting is already costing you.

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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.

If you are being billed by the hour for professional services, now is the time to renegotiate, as AI has put the billable hour on life support.

In January 2024, during his recuperation from surgery and radiation treatment of thymoma — an extremely rare cancer — Los Angeles-based attorney Aaron Shechet, "wanted to do something for my wife and law partner, Leigh, who proved what being there 'for better or for worse' means. She said, 'Make an app that helps me bake better sourdough.'

"So I built an app to take pictures of her sourdough bread — AI analyzes the picture and tells how to improve it. It came out so good that I released it on Android and Apple."

Then an idea came to Shechet. "What if I could develop a platform that helps service providers, accountants, lawyers and other professionals use AI programs that would save them hours and result in significant cost savings to their clients?"

Veilgrid was the result. "It is a platform that creates custom AI-powered tools tailored to specific business activities," he notes, "such as drafting contracts, leases, various sorts of documents and automating related office functions, saving upwards of 75% of the time required to do the same work manually."

AI impacts professionals and their clients/customers

Shechet has been a mediator and fee arbitrator in Los Angeles for years, and he has impressed me with his concern for clients trapped in billable-hour spirals. He sees a tsunami coming to those professions that view efficiency as their mortal enemy.

"Billable hours reward lawyers, accountants, management consultants — to list just a few — for spending more time on a task," he says. "Faster work — efficiency — directly reduces total revenue, as you can't bill a whole lot of hours.

"With AI, the incentive is to be more efficient, as you will invoice on the completion of work, not the hours to do the work."

He adds, "Clients do not care how the final product was produced — they just want results, the more economical the better. And they know that AI saves an enormous amount of time in producing reproducible items, such as contracts, leases, tax returns and so much more."

A new standard of care

Shechet strongly believes that the new standard of care for law and other professions, figuratively speaking, will be a $5 charge with "AI quality," instead of hundreds of dollars an hour with potentially less quality.

"What clients pay must come down," he says. (For the record, AI is wrong sometimes, so someone still needs to check the work to make sure it's accurate.)

He lists tasks where AI is most effective in law that would take hours to do manually and cost clients hundreds to thousands of dollars:

• Anything written, including contract drafting, pleadings, motions and discovery
• Summaries of depositions for senior partners that can be generated in minutes
• Legal research that requires dramatically reduced time
• Tasks that once took teams of junior associates weeks can now be completed by a single attorney in a few hours or even seconds

AI also works 24 hours a day. It doesn't have student loans or employment insurance, it doesn't complain, and it doesn't face employee lawsuits.

New billing methods

Shechet and many other observers expect to see subscription models where a lawyer, accountant or other professional is on call to handle all the matters a client needs for a flat monthly fee.

"We should also see more per-job and contingency fees," he notes, adding, "AI is no longer in the experimental stages for many professions. It is being widely adopted. Clients need to ask their lawyers, accountants and other professionals who bill by the hour, 'Are you using AI to save me money? And if not, why not? Why does this professional service cost so much?'"

What's the impact on lawyers?

I asked Shechet what impact AI will have on the human side of the legal profession.

"There will be little justification," he says, "for massive law firms — that have been compared to pyramid schemes — to reward senior partners while demanding impossible 2,000 yearly billable hours from junior lawyers. That (practice) has invited decades of bill-padding and outright fabricated work and destroyed marriages and families.

"The need for lawyers will shrink, and hopefully, the ability to go home at 5 p.m. and have dinner with the family and have a life will return to the legal profession."

For anyone considering law as a career

Shechet cautions that law can no longer be recommended as a safe, automatic path to a high-income career.

"But if law is pulling you, go for it. Follow your instincts, but do not expect the profession to look the way it did 20 years ago. Veilgrid came from following what presented itself: I built it for our practice, then other lawyers, then other professions, and finally, it became a platform.

And he cautions, "Anyone considering law should think very carefully about debt. Do not borrow an enormous amount of money because this seems like a safe profession. The supposedly safe, predictable part of legal work is exactly the part AI is commoditizing most quickly."

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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• We Gave AI Chatbots 5 Financial Challenges. Here's How They Did

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…

A pricing war is afoot among cutting-edge artificial intelligence vendors. Meta will jolt the competition with cheaper advanced AI tools for businesses from its new AI model, Muse. SpaceX’s latest Grok AI is built for efficiency and low costs, priced 60% cheaper than Anthropic. Microsoft is shifting from Anthropic and OpenAI to its own, cheaper internal AI tools for apps such as Excel and Outlook.

Meanwhile, cheaper Chinese AI models such as DeepSeek and Kimi are quickly gaining ground, though congressional investigations may lead to attempts to put curbs on the foreign tech. The latest version of Kimi, developed by Chinese company Moonshot AI, has sparked equal measures of excitement from U.S. customers and concern from leading American AI companies and federal officials. U.S. policy concerns include China’s massive government subsidies, intellectual property theft, cybersecurity risks and the general threat of Chinese competition.

The competition could put pressure on profit margins for AI leaders, which still must invest massive sums of money to develop and deploy leading tech. The latest Grok 4.5 model is a threat to Anthropic and OpenAI since it is a "'good enough,' fast, and super-cheap model," writes Neil Shah, analyst at Counterpoint Research, in a recent post. “Now enterprises have an attractive option, allowing them to optimize their AI spend before it spirals out of control.”

But there’s a catch for companies excited to see lower prices: Customers aren’t likely to save money because their AI use is rising so fast — AI is billed based on how much is consumed, which is far outpacing per-unit cost declines.

That remains true even as the long-term trends look promising for customers. Market research firm Gartner says a combination of efficiency improvements in chips, data centers, software and more will drive down prices. "By 2030, performing inference on a large language model with one trillion parameters will cost GenAI providers over 90% less than it did in 2025," according to their analysis from March.

Not all the savings will be passed on to customers, says Gartner, and cutting-edge agentic AI, which automates all sorts of computing tasks, consumes far more AI compute. "Agentic models, for example, require between 5-30 times more tokens per task than a standard generative AI chatbot," says Gartner. (Tokens are the units of data processed by AI. Companies are commonly billed by how many tokens they use.)

So what are companies going to do to reel in AI budgets? “Enterprises will learn and become prudent not to stick to one vendor or model,” according to Shah. That means that most complex tasks can be accomplished with the most expensive, best AI. Simpler tasks can be done with cheaper AI tools.

Gartner recommends that companies maintain a list of tasks that require high-end AI tools, train employees on how to reduce AI costs, post limits on individual token consumption and closely track AI usage.

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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My father was a general agent at Manulife when he was diagnosed with a rare neurological disease at 56. The disease progressed slowly, gradually taking his ability to write, then to speak. I attended his client meetings, became his hands and eventually his voice.

Because he had disability insurance, my family never had to worry about money during the most difficult years of our lives. That is the story I carry into every client conversation.

Campaigns like Disability Insurance Awareness Month serve as a useful reminder of when and how to introduce disability planning into client conversations. Of course, individual situations and outcomes vary, but that's exactly why I believe so strongly in having this conversation early.

The right time to broach the subject is before a client thinks they need it. Most people have never been seriously asked what would happen to their income if they couldn't work. The longer that question goes unasked, the harder it becomes to answer without a crisis forcing the issue.

The common objection — "it won't happen to me" — is best met with storytelling rather than hard data. My father's story often opens the door to a more personal question: "What's your plan if something happens to you?"

The role of disability insurance in a financial plan

Disability insurance is typically framed as income replacement — a safety net in case you can't work. That framing tends to undersell its value. For high earners, it's something more fundamental: The protection that keeps everything else in a financial plan intact.

For illustrative purposes, consider a scenario where a client earning $1 million a year becomes disabled. Their group plan has a hard cap at $10,000 a month, which protects only $120,000 of their annual income. Meanwhile, the market is down.

With no individual disability policy, they can draw down the retirement portfolio they spent decades building, or dramatically alter the lifestyle they planned around. Without disability protection, their financial plan is exposed.

Think of disability insurance as a lever. When you're disabled and not generating income, everything else in the plan — investment accounts, college savings, a family's lifestyle — depends on that lever holding up. If it fails, the plan may fail with it.

Disability insurance policy features

Once a client is ready to consider buying disability insurance, the conversation moves to policy mechanics.

The elimination period is the waiting period before benefits begin, typically 90 or 180 days. Ninety days is generally the right balance of cost and coverage, whereas 180 days is too long for many clients. Existing short-term group coverage can help determine which is appropriate.

The own-occupation definition matters most for professionals whose work is highly specialized. A dentist who develops chronic back problems from years of leaning over patients may never return to dentistry, but could technically work in another field.

Without own-occupation coverage, that dentist may receive no benefits. With it, they may be better protected, depending on policy terms.

The recovery provision is the least understood and can be particularly valuable in certain situations. When a recently disabled client returns to work but earns less than they did before, this provision bridges the income gap.

For commission-based professionals and business owners, the income rebuilding period can be just as financially damaging as the disability itself. A financial adviser who goes on claim for a year and returns with an empty pipeline may need six to 12 months to rebuild.

The recovery provision fills that period. Some carriers cap it at one year, while others extend it for the full benefit period.

Disability insurance vs business overhead expense insurance

Disability income insurance protects a business owner's personal income. Business overhead expense (BOE) coverage protects the operating costs of the business itself — rent, staff salaries, equipment, administrative expenses — while the owner is unable to generate revenue.

Most advisers can walk a client through this distinction without hesitation. The harder conversation, and often the one that hits closest to home, is the one they need to have with themselves.

Many advisers own their practice but do not have BOE coverage. They are, by definition, business owners, and every adviser who has committed to office overheads, support staff or an independent practice structure carries the same risk exposure as any other self-employed professional.

When a disability sidelines the person responsible for bringing in revenue, the fixed costs of the business don't pause. BOE coverage ensures those obligations are met and the business remains intact while the owner recovers.

Most policies have a maximum benefit period of two years, may be tax-deductible in certain circumstances, and are relatively affordable, particularly compared to the exposure they offset.

BOE coverage also changes the psychology of recovery. An adviser who has suffered a serious illness or injury faces enormous pressure to return to client-facing work before they're ready, knowing that every day out is a day the business is stalling.

A BOE policy removes that pressure. It makes it possible to focus on getting well, and to keep the promises made to clients in the process.

The importance of planning ahead

Disability planning has to happen before the diagnosis. Once a serious illness or injury happens, cognitive function is affected, decision-making is harder, and the ability to evaluate options clearly is compromised. The coverage, policy details and business overhead protection should all be in place before they're needed.

Disability doesn't discriminate by age, fitness or risk profile. It can happen across a wide range of individuals and circumstances, and is most likely to occur during the long window of working years, when income is highest, obligations are greatest and the financial consequences of losing that income are most severe.

The advisers who serve their clients well on this are the ones who treat disability coverage as a standard part of every financial plan.

This article is intended for informational purposes only and does not constitute financial, insurance, or tax advice. Individuals should consult their own qualified professionals to evaluate their specific circumstances before making decisions.

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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.

If I pulled one of your advisers aside tomorrow and asked them to walk me through your sales process step by step, from start to finish, could they do it? Could they tell me what happens in the first appointment, what gets said, what questions get asked and exactly how a prospect moves from curious to committed?

If the answer is "probably not," you don't have a sales process — you have a sales idea. And ideas, as good as they can be, don't scale.

I want to start there, because I believe the sales process is the single highest-leverage investment you can make in your business. Not a new CRM. Not a different marketing strategy. A documented, repeatable, trainable process for how you help people make one of the most important decisions of their lives.

Why systematizing your process changes everything

Here's the thing about a systematized process: It gives you data, and data gives you power.

When you can map out every stage of your sales process — first appointment, discovery, presentation, follow-up and close — you can start to see exactly where people fall off.

Maybe your first appointments are strong, but your second appointments are where you lose momentum. Maybe your close rate is great, but prospects are taking 90 days to convert when they should be taking 30. You'll never know until the process is written down.

I've talked to hundreds of top advisers, and the ones who are scaling, really scaling, aren't the ones with the most charisma in the room. They're the ones who've taken what they do naturally and turned it into something teachable.

Small hinges swing big doors. A 5% improvement in your conversion rate, compounded over a full year of appointments, is the difference between a good year and a great one.

Start with a recording

So, how do you build a process if you don't have one documented? Start with a recording.

With your client's permission, record three to five of your appointments. Then, upload those recordings into an artificial intelligence tool. Ask it to do a few things:

• Identify the structure of your conversation
• Flag where transitions happen
• Note the questions you ask and when you ask them
• Outline what you're communicating in each phase of the meeting

What you'll get back is a mirror. You'll see your process as it actually exists, not how you think it exists. And from that mirror, you can start to build something real — a written framework with defined stages, key questions, value statements and transition language. A process that lives outside your head.

Once it's documented, it's trainable. Now, when you hire an adviser, you're handing them a playbook of your sales process instead of hoping they pick it up through osmosis. That is how you scale.

Use AI as your personal sales coach

For those of you who already have a process — maybe you've been in this business for 15 years — you know your steps and your language. Here's how AI can still level you up.

Open your AI tool of choice and prompt it like this:

"I want you to act as an expert sales trainer who specializes in financial services and complex consultative selling. Here is my current sales process. Review each step and tell me: Where is there friction? What objections am I not addressing early enough? What questions should I be asking that I'm not? How can I tighten my value proposition?"

The feedback you get will be genuinely useful. AI has absorbed more sales methodology, psychology and process design than any single coach you could hire. Used this way, it's like having a world-class sales trainer on call, available whenever you have 30 minutes and a willingness to improve.

Then try something it suggests. Not 10 things — just one. Test a new discovery question. Adjust your transition into the second meeting. Refine how you open the closing conversation. See what moves the needle. If it works, bake it into your process permanently.

Remember why the process matters

I want to say something that I think gets lost in all the talk about conversion rates and close ratios: This is really about helping people.

Sales is a noble profession. I believe that in my innermost being.

Think about what you're actually doing when you sit across from a prospect. Most people, given the choice, will not make a decision. They will procrastinate, defer and wait until "the right time." They'll let inertia decide for them. They'll reach retirement having never truly planned for it, not because they didn't have the resources, but because no one ever pushed them to act.

You are that person. You are the one who sits down with someone, helps them see what their future looks like and then helps them do something about it. The work you do to improve your process, to sharpen your questions, to get better at guiding people through a decision — that work directly translates into better retirements for real people.

Believe in what you do. Work hard at it. Don't apologize for being good at converting people, because converting them means they're supported. It means they'll have a plan when the market drops. It means their spouse won't be left scrambling.

The best salespeople I've ever met aren't the slickest — they're the ones who believe most deeply that their clients need what they're offering and have refined their ability to communicate that clearly.

A challenge for you

Record your next three appointments and upload them into AI. Build or refine your documented process, then share it with your team and train against it. If you already have a strong process, spend 30 minutes with AI acting as your sales coach and identify one thing to improve. Just one.

The advisers who will look back on 2026 as a breakout year won't be the ones who worked harder. They're the ones who worked on the right things — and a systematized sales process is one of the right things.

You help people enjoy their retirement. What you do matters. Do it with intention, do it with excellence and do it with the confidence that comes from knowing your process cold.

Make this the year you build something that scales.

Advisors Excel's mission is simple yet profound: to help good advisers become great business owners while enabling their clients to enjoy the retirement of their dreams.

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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.

Your business is going to spend more on AI this year. Three-quarters of finance leaders raised technology budgets for 2026, nearly half of them by 10% or more, and financial services firms led every other sector with increases around 15%.

The decision to spend is made. The harder question is the one your budget process is not built to answer: How do you forecast a cost that changes based on how your people use a tool?

Most firms get this wrong in two specific ways. Let's review both before you build your AI budget.

Mistake one: Budgeting AI as a fixed cost

You are used to software that costs the same every month. You buy a number of seats, you pay a flat fee, and the bill is the bill.

AI does not work that way. The cost tracks consumption, not headcount. Two advisers on the same license can generate wildly different bills because one runs long reports through the tool all day, and the other asks it a question twice a week.

This breaks the annual budget. You cannot set one number in January and hold it, because usage climbs as your people get better at the AI tool and find more uses for it.

A fixed line item guarantees one of two outcomes. You overfund it and waste capital you could have deployed elsewhere, or you underfund it and face an overage conversation in a near future quarter.

Treat AI the way you treat a variable operating cost, not a license. Build it as a range with a floor and a ceiling, then forecast on a rolling basis and revise quarterly. A firm running this as a static annual figure is budgeting a variable cost with a fixed budget, and the budget will lose.

Mistake two: Budgeting only the token bill

The number the vendor invoices you is the visible part of the cost. It is not the whole cost.

Every AI workflow carries expenses that never appear on the vendor's bill, namely the human in the loop.

• Someone must review the output before it reaches a client, because a fiduciary cannot send unreviewed AI work product to the people who trust the firm with their money
• Someone must train staff on the tool
• Someone must maintain the governance, the acceptable use policy, the compliance records that an examiner will ask for

These are real costs, they scale with adoption, and they belong in the same budget line as the tokens.

This is why ownership matters as much as the number. Research on AI return shows that firms where technology teams own AI spend alone capture less value than firms where finance and compliance share the decision.

The token bill is a technology expense (although it should be a business expense). The review time and the regulatory exposure are not. Budget them together or you will underfund the part that keeps you out of trouble.

Budget against honest return, not the promise

Here is the number that should govern how aggressively you fund this. Less than 1% of executives report AI returns of 20% or greater, and a majority report returns in the range of 1% to 5%.

Meanwhile, Gartner expects 30% of generative AI projects to be abandoned after the proof of concept stage. The spending is real. The proven return, for most firms, is not yet.

This does not argue for sitting out. It argues for funding against measured outcomes rather than the vendor's promise. Tie each AI budget line to a specific result you can measure, such as hours saved in a named workflow or a reduction in a particular operational cost.

Fund the use cases that clear that bar and reject the ones that do not. The firms that win the next three years will be the ones that fund AI where the business case is strong and measurable and refuse to fund it anywhere else.

How to build the number

Start with a pilot you meter. Run one real workflow through the tool for a full month and read the bill. That gives you a true cost per task, which is the only honest input to a forecast. Multiply by realistic adoption, not best-case adoption. Then add the costs the vendor never invoices: The time to review output, the time to train staff, the work to maintain governance.

Build the result as a range. Set a floor that covers committed usage and a ceiling that absorbs the growth you know is coming. Attach a pay-as-you-go overflow so that crossing the ceiling slows you down rather than cutting off a workflow your advisers now depend on. Then revisit the whole figure every quarter, because the underlying prices are moving and your usage is moving faster.

AI is now a permanent line in your operating budget. Treat it like one. Forecast it like a variable cost, fund it against measured return, and revise it on a schedule. The CFO who does this will deploy capital where it earns its keep. The CFO who sets a fixed number in January will spend the year explaining variances.

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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.

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.

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.

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.

Read More

• What Will Happen to Your Business When You Retire? How to Exit Successfully and Thrive in Retirement
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• I’m 64, Retired, and Want to Invest $400,000 of My $2.4 Million Portfolio in a Winery Startup. Am I Crazy?

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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