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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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.

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.

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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.

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.

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

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

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

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

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

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

A map of the commercial lending landscape

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

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

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

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

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

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

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

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

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

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

Industry matters more than you think

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

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

Industries with active, specialized lending markets include:

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

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

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

The five things lenders actually look at

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

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

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

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

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

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

How to prepare before you apply

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

Here's what to assemble before you start:

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

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

The bottom line

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

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

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

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

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

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

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

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

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

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

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

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

Start with readiness

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

Often, it comes down to two questions:

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

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

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

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

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

Assemble the right team

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

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

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

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

Plan for the proceeds

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

• Lifestyle needs
• Philanthropy
• Wealth transfer

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

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

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

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

Prepare for the emotional roller coaster

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

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

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

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

Execute pre-sale planning strategies

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

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

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

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

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

Avoid the common post-sale mistakes

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

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

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

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

The deal is done, and the real work begins

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

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

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

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

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

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

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

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

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

1. Start with the fundamentals

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

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

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

2. Walk clients through the process

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

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

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

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

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

3. Clarify the three access points

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

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

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

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

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

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

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

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

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

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

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

4. Reframe the 'first-day pop' conversation

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

Neither reaction is especially useful for long-term investors.

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

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

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

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

5. Tie it back to the plan

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Proper AI adoption could make your business more valuable

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

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

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

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

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

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

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

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

Take guilt out of the equation

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

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

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

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

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

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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.

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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• From Vision to Value: A Blueprint for Helping to Build Your Advisory Practice
• Winning Strategies for Financial Advisers as Clients' Lives Evolve

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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• The Future of Financial Advice Is Human: Gen Z Trusts Advisers, But AI Skills Matter
• Have a Retirement Question? AI Can Answer That
• How Gen Z’s Retirement Planning and Investing Are Different
• Many Older Adults Lack Financial Security: What Can We Do?

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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• A Financial Planner Takes a Deep Dive Into How Charitable Trusts Benefit You and Your Favorite Charities
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• How to Maximize Your Impact With Strategic Philanthropy Tools
• Every Dollar Counts: How to Evaluate a Nonprofit

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.

Related Content

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• 12 Tax Strategies Every Self-Employed Worker Needs in 2026
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• The Tax Trap Snares Many Business Owners: A Financial Pro's Guide to 11 Strategies You May Be Missing

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.

Related Content

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• Build Relationships, Build Your Brand, Build Your Business
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• In 2026, the Human Touch Will Be the Differentiator for Financial Advisers
• How to Position Your Business for a Lucrative Exit Despite Private Equity's Slowdown

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.

Related Content

• Starting to Advise Ultra-Rich Clients? Don't Rebuild Your Firm, Just Rethink It
• Are You the Doer or the Visionary of Your Advisory Practice? Here's How You Can Make the Leap to Chief Vision Officer
• To Win HNW Clients, Consider an Unbundled Advisory Model That Delivers Objective Oversight
• From Vision to Value: A Blueprint for Helping to Build Your Advisory Practice
• Winning Strategies for Financial Advisers as Clients' Lives Evolve

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.

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

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

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

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

An effective hedge against instability

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

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

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

The key to an effective escape route

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

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

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

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

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

Protection against circumstances beyond your control

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

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

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

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

Asset protection in an uncertain world

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

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

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

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

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

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

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

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

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

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

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

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

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

What wasn't going to work

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

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

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

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

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

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

Dodging issues postpones the inevitable

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

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

There are several obvious problems:

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

Avoiding procrastination

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

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

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

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

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

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

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

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

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

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

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

Don't wait to figure it out later.

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• Succession Musts: Thoughtful Planning and Frank Discussions
• The Secret to a Seamless Business Handover: Combined Estate and Succession Planning
• The Entrepreneur's Exit: How to Sell (or Pass on) Your Business Without Losing the Family
• Financial Planning Tips for Business Owners Raising Kids

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

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

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

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

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

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

Loss of identity catches business owners off guard

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

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

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

Personal planning to complement financial planning

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

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

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

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

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

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

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

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• How to Tackle the Nowhere-to-Be Thing in Retirement and Make a Winning Play With Your Time
• Gary Has a Plan for Retirement: Crash on the Sofa and Veg. Here's the Problem With That …

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

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

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

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

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

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

Pressure from all directions

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

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

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

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

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

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

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

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

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

That engagement shows up across the firm:

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

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

Raising the bar

This shift raises the bar for both founders and investors.

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

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

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

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

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

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

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

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

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

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

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

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

Joe took a few practice throws, adjusted his stance and launched the shoe toward the basketball. The result, however, was the same: The ball stayed exactly where it was.

For their third attempt, the team shifted from strength to strategy. They conducted a team planning session, carefully analyzing the situation. They studied the structure of the tree, examined the branches and mapped out the precise point the shoe needed to hit to dislodge the ball.

When they implemented their plan, everything went exactly as they designed it. Yet, despite their perfect strategy, the basketball remained stuck in the tree.

Across the street, another team had been observing the situation. After watching the third attempt, they walked over to offer their help. The other team assessed the tree and then the shoe.

Without much hesitation, they threw the shoe into the tree, lodging it alongside the basketball.

The average team reacted immediately with frustration, pointing out that the situation had only worsened now.

Calmly, the other team responded that they did not make the problem worse. Instead, they removed the thing (the shoe) that was preventing the average team from seeing the obvious solution.

They then pointed to a ladder nearby.

How this relates to running a business

I've consulted with thousands of businesses, mostly RIA firms, for nearly 25 years now. And I have observed the pattern illustrated in the above story at many different levels and in firms of every size.

The distinction between the two teams is subtle, but significant. The average team believed the problem was the basketball stuck in the tree, and they focused all of their effort, strength and planning on dislodging it.

What they failed to recognize was that their solution — the shoe — was in the way. Until the shoe was removed, no amount of additional strength, effort or strategic planning would change the outcome … unless they were lucky.

In my years of consulting, I have found that from the outside, the best-run firms appear remarkably similar to their peers. They offer comparable services, serve similar clients and often rely on much of the same technology. The difference is not visible on the surface, unless you work inside those firms.

Internally, the best-run firms operate with a fundamentally different kind of logic. Their effectiveness, performance and growth rates are driven less by perfect strategies and more by how they think about problems.

They move faster not because they do more, but because they simplify decisions, identify what matters most and act on them without hesitation.

This logic is the defining difference between average growth and exceptional growth.

How the best-run firms separate themselves

I have been able to observe this clearly through the length and depth of our consulting relationships, many of which span years and even decades.

That kind of sustained engagement provides a unique vantage point: We are able to see not just what firms say they will do, but what they consistently do over time and how those decisions compound.

The best-run firms separate themselves because of this discipline.

The firms that have grown from small practices into national leaders, many of which I have had the privilege to work with, did not achieve their success by refining the equivalent of the shoe.

They achieved it because they consistently recognized when the method itself had become the problem. In doing so, they avoided the trap of repeated effort, the kind that consumes time and capital and ultimately exhausts talented people without producing meaningful results.

By contrast, average firms tend to spend significant time discussing their challenges, analyzing their situation and documenting their strategic or growth frameworks (or learning someone else's).

They provide detailed explanations of leadership dynamics, communication preferences, planning processes and internal meeting structures.

While these efforts are well-intentioned, they often fail to isolate the single limitation that is actually slowing their progress.

In many cases, the focus shifts toward improving performance within the existing approach rather than stepping back to question whether the approach itself is the problem. As a result, energy is applied in ways that feel productive but do not change results.

The best-run firms collapse and simplify that entire mentality. Instead, they operate from a more fundamental understanding: At any given moment in the growth of a business, there is a bottleneck (in consultant-speak, it's known as the Theory of Constraints) that limits the organization's ability to move forward.

Just as important, they have accepted that this is not a one-time exercise. Each time a constraint is removed, another emerges. Progress is achieved through continuous identification and removal of what is in the way.

Where these firms' success comes from

The effectiveness of these firms comes from their discipline. They do not get distracted by complexity, nor do they confuse activity with progress.

They remain focused on the single question that matters most: What is in the way, right now, today?

Once identified, they act decisively to eliminate or replace it and then immediately turn their attention to what follows. Over time, this creates a compounding effect that is often mistaken for superior strategy, talent or marketing, when in reality it is the result of consistent, focused implementation.

I understand that not every firm aspires to be the largest or most prominent business. However, regardless of size or ambition, the responsibility of leadership remains the same.

Your role is not to perfect every system, satisfy every preference or refine every strategy.

Your role is to identify what is preventing progress and remove it.

In other words, stop throwing the shoe — and go get the ladder.

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

In recent years, portfolio construction conversations often centered on where returns might come from next.

For the remainder of 2026, the starting point is shifting back toward a different question of how portfolios may behave if markets don't move as expected.

That change reflects a broader reassessment of diversification and downside management, particularly after recent market shifts challenged long-standing assumptions.

Take the 2022 market as an example. Stocks and bonds declined together, and the diversification benefit that many investors expected from fixed income did not materialize. Bonds worked as a hedge during previous market downturns, including the 2008 global financial crisis.

But more recently, correlations have proven less stable. While stock-bond correlations moved back toward negative territory after 2022, they have shown signs of shifting again. For advisers relying on a traditional 60/40 framework, that variability matters.

At the same time, ETF usage continues to expand as advisers refine portfolio construction tools. U.S.-listed ETFs gathered more than $1.5 trillion in net inflows in 2025, the highest annual total on record, according to State Street.

The report highlights how ETFs are increasingly used for targeted exposures and portfolio precision rather than solely broad index replication.

Within that broader growth, defined outcome and buffered ETFs have continued to gain traction. Assets in U.S.-listed defined outcome ETFs have grown to about $70 billion, with several billion dollars in net inflows in 2025, according to ETF Database's 2025 category analysis.

Forward-looking data also suggests sustained interest. In Brown Brothers Harriman's 2025 Global ETF Investor Survey, 29% of respondents indicated plans to allocate to buffered or defined outcome ETFs over the next 12 months.

Taken together, these figures suggest that defined outcome strategies may be moving beyond niche status and becoming more integrated into adviser toolkits.

Why now?

One factor could be renewed attention to how diversification functions in different market regimes. If stock-bond correlations are not consistently negative, relying solely on fixed income to provide downside protection may not deliver the expected results.

That has prompted some advisers to consider alternative approaches to managing equity risk while maintaining participation in the equity market.

Another factor is portfolio positioning. Despite strong equity performance over the past several years, elevated levels of cash and cash-like allocations remain in the system.

For some investors, re-entering markets with defined parameters around downside risk can provide a structured path back into equities.

When clients understand the range of potential outcomes in advance, including both the upside limitations and the downside buffers, conversations during volatile periods often become more grounded in agreed-upon parameters rather than short-term market headlines.

How does it work in practice?

In practice, advisers are incorporating defined outcome ETFs in several ways.

Some are carving out a portion of a core equity allocation, for example, within U.S. large cap exposure, and replacing it with a buffered strategy that maintains exposure to the same asset class while incorporating a predefined level of downside protection.

Others are using buffered ETFs as a redeployment vehicle for cash. Rather than moving directly from money markets into full equity exposure, advisers may choose a structure that provides participation on the upside while defining downside parameters.

A third approach involves carving out a portion of fixed income and reallocating to a buffered equity strategy. The goal in this case is not to eliminate fixed income, but to increase equity participation while incorporating a built-in layer of protection that does not depend on bond-equity correlation dynamics.

As these strategies have grown, misconceptions have emerged. One of the more common views is that the return cap embedded in many defined outcome structures represents an added "fee."

Structurally, the cap reflects the economic trade-off required to finance the downside-protection component.

Advisers evaluating these strategies must weigh that tradeoff in the context of client objectives and risk tolerance, but it is distinct from an explicit management fee layered on top of market exposure.

Bringing risk management to the fore

None of this suggests that traditional asset allocation frameworks are obsolete. Bonds continue to play an important role in income generation and duration management.

But recent market experience has reinforced a broader point that risk management considerations must be incorporated at the asset allocation stage, before they are urgently needed.

For advisers in 2026 and beyond, that shift is less about forecasting market direction and more about structuring portfolios with defined expectations. In that sense, risk management is not a defensive afterthought. It is becoming a core design principle.

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• Is Your Portfolio Overweight? How to Rebalance Your Way Back to Diversification

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

As we near this summer's 250^th anniversary of America's creation, the independent spirit is strong. It's certainly creating more millionaires, a number that has doubled since 2020.

The next-level wealth is out there, too, with Forbes reporting that $1.17 million to $2.7 million in net worth puts someone in the nation's top 5%.

For independent advisers seeking more of these HNW clients, the opportunity — and challenge — is clear: How do you stand out in a landscape crowded by banks, major wire houses and other independents?

There's a reason you became an independent adviser, and that needs to show; it's your unique brand and core values. But just as important, how does your independence benefit the high-net-worth client?

Full-service integration is key, but there's a distinction between internal* and external professionals who can add to your advisory services. When you outright explain that distinction and its benefits to the client in front of you, you can win business with clarity and conviction.

What high-net-worth clients want (and expect)

High-net-worth clients rarely deal with simple planning issues. Their lives often include closely held businesses, trusts, estate questions, charitable goals, tax complexity and family dynamics across generations.

They need more than investment management. They need advice that fits together across legal, tax and financial decisions.

Generally, firms are making two main choices: Either bringing legal and tax professionals into the same office,* or relying solely on external legal and tax professionals to supplement the firm's core comprehensive (Income, Investments & Wealth Management, Tax, Health Care & Wellbeing and Estate & Legacy) financial planning services.

Types of Integration

As many independent firms grow, there is often a desire to add services internally* that were once external. Advisers will choose to bring legal and/or tax professionals together in the same office* to have a differentiator, a potential advantage over those who do not.

"Comprehensive financial planning" can be marketed as a convenience for clients, who can meet with all their financial professionals in the same office, perhaps on the same day — a total experience held under common ownership, control and operation.

For external integration, advisers choose to maintain traditional comprehensive financial planning functions while using separate tax and legal professionals outside the firm, working with them in ongoing relationships to serve the same client.

This can offer an unbiased perspective and oversight from outside the firm, as well as a similar level of integrated services (given well-defined external relationships).

Internal vs external integration

The appeal of the internal model* is easy to understand. A firm can coordinate and collaborate tax and legal functions (with proper verbal or written authorization) in a streamlined process and offer clients one office, one team and one brand. That sounds efficient and marketable.

But advisers should be honest about a potential tradeoff. Convenience is not the same as independence. When one firm controls investment, tax and legal planning, the client may get a seamless experience, but not enough independent outside oversight.

When the other disciplines, be they tax or legal, answer to the wealth management leadership, they often become beholden to them. Advice may still be coordinated and collaborated, but it's not independent when the same firm wears multiple hats, creating new, unnecessary liabilities and conflicts of interest for the firm and its clients that a true independent model avoids.

That is where an unbundled model can stand apart. The external integration model does not mean working alone. It means the client benefits from independent professionals across key disciplines.

In practice, that often means the adviser coordinates and collaborates (with proper verbal or written authorization) the overall strategy, while outside attorneys and tax professionals provide legal and tax guidance.

Those external professionals are not held under common ownership, control or operation of the financial adviser. They are free to agree, question or push back based on their own professional judgment. That creates checks and balances.

That is not fragmentation. It's coordination and collaboration.

True independence

Many advisers chose independence for good reasons. They wanted to move away from quotas, product pressure, cross-selling and centralized control. They wanted more freedom to serve clients well.

Yet some firms slowly rebuild the same structure they once rejected. They add departments, bundle services and create an internal system that starts to resemble the big institutions they left behind. The branding looks different, but the operating model feels familiar.

That should raise a hard question: Are you truly independent, or have you re-created a smaller version of the same model?

This is not a knock on growth. It's a warning about drift. If every professional involved in the client relationship is held under common ownership, control and operation, your model may be less independent than your messaging suggests.

Labels and messaging to attract HNW clients: Don't muddy the waters

Many high-net-worth clients meet advisers through various channels, including referrals, ads, seminars and centers of influence in their phone's social scroll.

The advisers they see in these channels often label and market their HNW services in many ways. Independent advisers often adopt titles such as "family office," "integrated wealth manager" or "private client services."

The trouble? These labels can mislead.

For example, "family office" is legally defined by the SEC as a firm that:

• Provides advice only to family clients (lineal descendants and certain key employees)
• Is wholly owned and controlled by family members or family entities
• Does not hold itself out to the public as an investment adviser

Most independent firms don't meet this definition, which can create confusion.

"Private client" was originally a bank term denoting exclusivity and white-glove service, but that doesn't necessarily describe integration.

Ultimately, it can be helpful to drop titles that don't fit. Instead, consider terms like "high-net-worth services" or "integrated wealth management."

More importantly, take time to explain your actual process. Explain exactly how your teams, internal and external, actively coordinate and collaborate for the client's benefit across their financial spectrum.

The HNW takeaway

In an industry where terminology can cloud the picture, the advisers who win are those who clarify how their assembled team delivers real integration. They do this with transparency and client-first planning.

Ultimately, clients need a planning structure and professionals who can work together for them, combining coordination and collaboration with objective review and oversight. That's the real message. True independence means independence for all involved, including the client.

If you can explain that plainly in the high-net-worth world, you offer something many firms do not.

* Tax Services (tax advice, tax returns & forms preparation & filing) and Estate Planning Services (legal advice, estate planning legal document preparation & execution) may be housed in the same or nearby office. However, they must be separate legal entities from your investment advisory and/or insurance practices (i.e., they may be held under common ownership, control, or operation).

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

According to the latest research, a growing number of U.S.-based CEOs, entrepreneurs and high-net-worth individuals (HNWIs) are quietly building a plan B in Europe.

There has been a huge upsurge in enquiries about relocating and gaining European citizenship in the past two years, as well as a recorded increase in emigration. Many commentators see this shift as a strategic response to rising geopolitical uncertainty and political polarization at home.

Multiple factors driving demand

While violent crime and civil unrest in the U.S. are cited as key reasons for the increasing interest in emigration, fiscal strain also plays a role. Many investors are showing increasing caution around U.S.-based investments due to perceived economic insecurity and doubts about the long-term stability of the U.S. dollar.

Some voices have even questioned its future position as the foundation of the petrodollar system and a widely perceived current overvaluation of the U.S. stock market is also contributing to a growing lack of confidence in the U.S. economy.

In light of this instability, Europe is increasingly viewed as a viable alternative for many Americans. They see it as more politically stable and a safer place to raise a family.

Healthcare is perceived to be cheaper and more readily available, and, in a post-Covid world characterized by remote working, living there is no barrier to running a business.

While some may see the flexibility provided by dual/multiple residency and citizenship simply as the latest luxury, the lower cost of living and promise of a more relaxed lifestyle make retiring in Europe a particularly attractive proposition for many.

Providing a pathway to citizenship

While most, but not all, EU countries will allow U.S. citizens to apply for and attain dual citizenship after a period of legal residency, the options for attaining residency through investment (known as a Golden Visa) are limited. Portugal, Cyprus, Latvia, Hungary, Greece, Malta and Italy are examples that will allow foreign nationals to get legal residency in exchange for substantial investment in the local economy.

Portugal, however, has a key USP when it comes to pursuing citizenship. It's the only one that provides a pathway to citizenship without insisting on relocation to achieve residency (although it's still an option for those who want it). This is especially attractive to North Americans who would prefer to continue working and paying tax within their own country while pursuing residency elsewhere.

It's important to note, however, that Portugal has just confirmed an extension of the timeline for citizenship from the previous five to, now, ten years. Although this had some impact on demand, it still makes it an attractive proposition for business leaders and HNWIs seeking to establish a workable Plan B.

Complex rules require expert advice

The evolving nature of residency/citizenship rules, like those playing out in Portugal, are just one of the reasons why it's sensible to seek informed, professional advice before you relocate.

Portugal, for example, doesn't have a legal framework for regulating fiduciary financial professionals, unlike the U.S. You'll be in a far stronger position if you work with licensed finance professionals with a strong track record of dealing with the complexities of the Golden Visa system.

Advice around the tax implications, both at home and within the chosen destination, can be complex and difficult to overcome without expert advice. The same applies to any financial restructuring of pensions and investments.

You may also need help with property sourcing and purchasing, not to mention investment thresholds and minimum stay requirements that apply in different jurisdictions. HNWI relocations may also require reputational and compliance checks.

Basic Golden Visa requirements for Portugal

Establishing dual citizenship, or residency by investment, needs to be seen as a long-term journey. For example, as a minimum, applicants for Portugal's Golden Visa will need to:

• Maintain legal residence in Portugal, which is not the same as tax residence, for a determined number of years. For a Golden Visa, legal residence requires maintaining the investment and spending an average of seven days per year in Portugal
• Have a clean criminal record
• Satisfy an A2 Portuguese language standard — equivalent to being an advanced beginner — either through completing a test called the Certificado Inicial de Portuguêse Lingua Estrangia (CIPLE), or a certified language course of 150 hours or more

Demonstrate ties to Portugal — a subjective requirement that basically asks applicants to show an interest in, or connection to, Portuguese culture.

During 2025, the U.S. likely experienced near zero net migration for the first time in decades, with more people leaving than arriving. While this trend is set to continue throughout 2026, interest is rising at a faster rate than actual relocation owing to the time, expertise and financial investment required.

For the majority, expert support from a residency and citizenship specialist will be the main driver in transforming 'Plan B' from a pipedream into reality.

Related Content

• How to Get Dual Citizenship: Pros, Cons and Steps to Take
• Setting Up a Business Abroad? 6 Mistakes to Avoid, From a Singapore-Based Financial Planner
• Considerations for Americans Who Want to Move to Europe
• What to Expect from the Global Economy in 2026
• Why 2026 Could Be the Year to Reconsider Global Diversification

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

Trust is in short supply these days, and not just in Washington.

Across American workplaces, confidence in leadership, information and intent has eroded, according to Gallup, in subtle yet deeply consequential ways. The result isn't just cultural discomfort; it's a direct hit to productivity, collaboration and performance.

Politics will grapple with the trust deficit in its own fashion. In business, however, the responsibility is more immediate and more actionable. Rebuilding trust isn't a messaging exercise: It requires a fundamental shift in how leaders show up, communicate and make decisions.

Why now? The ground has shifted. Employees operate in a more complex, skeptical information environment. The line between fact and fiction feels more blurred than ever.

Conflicting narratives and AI-driven deepfakes amplify this confusion. In this environment, trust is no longer assumed. It has to be earned — deliberately and consistently.

Adapting to an AI-integrated workplace hinges on one thing: Trust. Not the kind you frame on a wall, but trust that is built into the operational fabric of the organization. It shows up in how communication flows, decisions are made and how organizations learn at scale.

This is especially true now. People curate their own information streams and shape their own versions of reality, typically validating their existing world view. Inside and outside the workplace, individuals gravitate toward like-minded perspectives. Cliques reinforce these viewpoints.

Breaking through these filters requires leaders to be deliberate, consistent and credible, which requires them to go beyond traditional culture efforts.

The bottom line: Barriers are going up inside your organization. It's up to capable, forward-thinking leaders to break through them, earn buy-in, build confidence and make a clear, credible case for the path forward.

Fear of losing control

According to the 2026 Edelman Trust Barometer, a global survey of more than 33,000 people across 28 countries, 70% of people are now unwilling or hesitant to trust someone who differs from them in values, background, culture or approach to social issues.

This isn't polarization anymore. It's something more insidious: Insularity. And it's quietly destroying collaboration, productivity and innovation in workplaces everywhere.

The consequences are stark and measurable. Forty-two percent say they would rather switch departments than report to a manager with different values. Thirty-four percent say they would put less effort into helping a project team leader who has different political beliefs.

This isn't about office politics or personality conflicts. This is a fundamental breakdown of the social contract that underpins organizations' functioning.

When teams can't trust across differences, projects stall. Innovation dies. The best ideation is disrupted due to the lack of cognitive diversity and constructive conflict.

The result: People self-segregate into their ideological comfort zone.

Even within this environment, there's a clear path forward if leaders address the underlying dynamics head-on. Start with a simple reality: A meaningful segment of your workforce will be hesitant to embrace any change and specifically AI-driven change designed to boost productivity gains.

Why? It's not fear of change. It's fear of losing control.

AI, by its nature, makes people feel displaced in their own roles. According to a 2026 ADP research survey, only 22% felt their job was safe from elimination, with workers reporting feeling less certain about where they fit, how decisions are made and what remains in their hands.

That perceived loss of control fuels anxiety. The issue isn't the technology itself; it's the uncertainty it creates. When people feel they no longer have agency, resistance follows. Understanding that distinction is the first step to address it.

Leaders must recognize this fundamental shift in the workplace. Focus on empowering your people to expand their capacity to process everything happening. The only way to expand it is by raising their level of awareness.

The co-creation principle

There is a practical way through this: Involve people in building what comes next because people commit to what they help create.

As AI integration reshapes workflows, decision-making and expectations, employees' voices should be integrated into the design process. Let them help choose what tools are used, how processes evolve and what new norms take hold. Participation drives ownership, and ownership drives adoption.

That's why the age of AI isn't just a technology shift — it's a cultural one. And culture still does what it has always done: It determines whether strategy actually works. You can have the best AI roadmap in the world, but if the culture resists it, progress stalls.

In the past, organizations could operate with a baseline level of skepticism and still function. In an AI-driven workplace, that's no longer the case. Without trust, adoption slows, collaboration weakens and productivity suffers. Building that trust isn't optional. It's fundamental.

For organizations, the path forward requires discipline. Recognizing the environment you are actually operating in, not the one you wish existed. Then, take a hard look inward. Where are you misaligned between intention and execution, strategy and rewards, culture and compensation?

From there, move into action. Build human verification into AI workflows. Train your systems properly, because the old rule still applies: Garbage in, garbage out.

Just as important: Design environments that help people stay grounded and focused. Invest in practices that build resilience and expand capacity across the organization.

And through it all, engage your employees in the process. Give them a voice in shaping change.

I said it before and I will say it again, people commit to what they help create. In a low-trust, AI-driven workplace, that may be the most important advantage you have.

So take the lead: Invite your team to co-create. Organizations that figure this out won't just survive the age of insularity; they'll define what workplace success looks like on the other side.

Related Content

• How to Prevent AI-Generated 'Workslop' From Destroying Your Workplace Relationships
• How to Adopt AI and Keep Employees Happy
• Adapting to AI's Evolving Landscape: A Survival Guide for Businesses
• I Met With 100-Plus Advisers to Develop This Road Map for Adopting AI
• Looking to Adopt AI in Your Finance Org? Consider These Factors First

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.

Each week in our Ask the Editor series, Joy Taylor, The Kiplinger Tax Letter editor, answers questions on topics submitted by readers. This week, she's looking at four questions on available tax breaks for retirees with a side hustle. (Get a free issue of The Kiplinger Tax Letter or subscribe.)

1. Medicare premiums

Question: I am 72 years old, and I pay monthly Medicare premiums. I retired from my full-time job four years ago. I am now a part-time consultant and file Schedule C, reporting my income and deductions from my part-time gig, with my federal tax return. My financial advisor said I can deduct my Medicare premiums that I pay, even though I don't itemize on Schedule A. Is that true?

Joy Taylor: Yes. As a general rule, medical expenses, including premiums paid for medical insurance and Medicare premiums, are deductible only by itemizers on Schedule A, and only to the extent that total medical expenses exceed 7.5% of adjusted gross income. There is an exception for self-employed individuals who file Schedule C. They can deduct premiums that they pay for medical and dental insurance and qualified long-term-care insurance without itemizing on Schedule A. They claim the self-employed health insurance deduction on Form 1040, Schedule 1, part II, line 17. Parts A, B and D Medicare premiums that you pay for insurance in your name are part of that deduction.

2. Business driving

out expenseQuestion: I retired from my full-time job a few years ago and receive a pension. I decided this year to take on part-time work as a dog walker. I work for myself, and I drive to my clients' homes to walk their dogs. I plan to file Schedule C with my 2026 Form 1040. Can I deduct the standard mileage rate for my business driving?

Joy Taylor: Yes. The cost of business driving for self-employed individuals is a deductible business expenses. You can claim either your actual expenses, including gas, repairs and depreciation on your car, or the IRS's standard mileage allowance. For 2026, the standard mileage rate for business driving is 72.5 cents per mile. If you use the IRS's standard mileage rate, you can also deduct the cost of any tolls or parking fees that you pay.

Be sure to keep a contemporaneous mileage log detailing each of your dog-walking trips. It will make it much easier for you to figure your total business mileage when you are preparing your tax return. It will also help you if you are ever audited by the IRS. Sloppy recordkeeping makes it easy for an IRS revenue agent to disallow your deduction.

3. Qualified business income deduction

Question: I recently retired from my full-time job, and I am now an independent freelance writer. I plan to file Schedule C with my 2026 Form 1040. Can I claim the 20% qualified business income deduction?

Joy Taylor: Generally, yes. Self-employed people, independent contractors and owners of LLCs, S corporations and other pass-through entities can deduct 20% of their qualified business income (QBI), subject to limitations for individuals with taxable income in 2026 of more than $403,500 for joint filers and $201,750 for single filers and head-of-household filers. This tax break, first enacted in the 2017 Tax Cuts and Jobs Act, was slated to end at the end of 2025. But last summer's "One Big Beautiful Bill" permanently extended the QBI write-off.

Note that you don't claim the QBI deduction on Schedule C. Instead, you would attach Form 8995 or 8995-A to your return and take the write-off on line 13a of Form 1040.

4. Home office

Question: I am a lawyer. I retired five years ago from my law firm. Even though I'm retired, I still do legal work for some clients on a part-time basis. I am an independent contractor now and file Schedule C with my tax return. I recently turned one of the bedrooms in my house into a home office where I can do my work. Can I claim the home office deduction on Schedule C?

Joy Taylor: Yes, if you meet all of the rules for claiming the write-off. Even though employees can't take a deduction for home office expenses, the write-off is available to self-employed people or independent contractors who file Schedule C with their 1040 and use a room or space in their home or apartment exclusively and regularly as their principal place of business. If you qualify for the write-off, there are two ways to figure the deduction. You can allocate your actual costs on Form 8829. Or you can use a simplified option by deducting $5 per square foot of space used exclusively for business, up to 300 square feet, resulting in a $1,500 maximum write-off.

About Ask the Editor, Tax Edition

Subscribers of The Kiplinger Tax Letter, The Kiplinger Letter and The Kiplinger Retirement Report can ask Joy questions about tax topics. You'll find full details of how to submit questions in each publication. Subscribe to The Kiplinger Tax Letter, The Kiplinger Letter or The Kiplinger Retirement Report.

We have already received many questions from readers on topics related to tax changes in the One Big Beautiful Bill, retirement accounts and more. We will continue to answer these in future Ask the Editor roundups. So keep those questions coming!

Not all questions submitted will be published, and some may be condensed and/or combined with other similar questions and answers, as required editorially. The answers provided by our editors and experts, in this Q&A series, are for general informational purposes only. While we take reasonable precautions to ensure we provide accurate answers to your questions, this information does not and is not intended to, constitute independent financial, legal, or tax advice. You should not act, or refrain from acting, based on any information provided in this feature. You should consult with a financial or tax advisor regarding any questions you may have in relation to the matters discussed in this article.

More Reader Questions Answered

• All Ask the Editor Q&As
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• Ask the Editor: How Can I Resolve My IRS Tax Debt?
• Ask the Editor: Tax Questions on Roth IRA Conversions
• Ask the Editor: Reader Questions on QCDs
• Ask the Editor: What Medical Expenses are Deductible?

For decades, obtaining a second passport was largely associated with lifestyle aspirations — retiring in Europe, reconnecting with family heritage or spending extended time abroad.

Today, however, a growing number of owners of U.S.-based small and midsize businesses are pursuing second citizenship or long-term residency for a very different reason: To strengthen their companies.

What was once a personal decision is increasingly becoming a strategic one.

Behind the scenes, entrepreneurs across industries — from e-commerce and manufacturing to consulting and tech — are incorporating global mobility into their business planning.

A second passport or foreign residency is no longer just about where you live. It's about how your business operates, grows and adapts in an increasingly unpredictable world.

Many business owners think about risk in terms of cash flow, supply chains or market competition. But fewer consider how much their company is tied to a single country's regulatory, political and economic environment.

That's starting to change.

A strategic move

For some entrepreneurs, a second citizenship acts as a form of strategic insurance. It can provide the ability to quickly relocate operations, open doors to new markets or ensure the business can continue functioning smoothly if conditions in one country become less favorable.

This doesn't mean abandoning the United States — it often means adding flexibility and creating options that didn't previously exist.

One of the most immediate advantages of second citizenship — particularly in a European Union country — is access.

For example, holding citizenship in a European Union (EU) member state allows business owners to live and work freely across all EU countries. That can simplify everything from opening a branch office to meeting clients in person without visa constraints.

For companies that rely on cross-border operations, this can be a meaningful advantage. It reduces friction, saves time and allows for more agile decision-making.

Even outside the EU, residency programs in countries with favorable trade relationships or regional access can help businesses expand more efficiently.

Widening the hiring pool

Another often-overlooked benefit is talent acquisition.

Hiring internationally can be complicated, especially when immigration rules, sponsorship requirements and processing delays come into play. Business owners with legal status in another country may find it easier to build and manage teams across borders.

In some cases, it can also make the company more attractive to global talent. Employees might be more willing to join a firm that already has an established international footprint and the ability to operate in multiple jurisdictions.

Uninterrupted service

The past several years have underscored how fragile supply chains can be. From pandemic disruptions to geopolitical tensions, many companies have experienced delays, rising costs or sudden changes in availability.

Having a legal and operational foothold in another country can help mitigate some of these risks. It might allow businesses to diversify suppliers, establish alternative production locations or shift logistics strategies more quickly.

The goal isn't to move everything abroad; it's to avoid being overly dependent on a single system.

Several steps to take

While the advantages can be significant, pursuing second citizenship or residency is not without complexity.

First, there's the time and administrative effort involved. Depending on the country and the pathway (whether through ancestry, investment or residency), the process can take months or even years.

Second, there are legal and tax considerations. The United States taxes its citizens on worldwide income, regardless of where they live. Obtaining another citizenship doesn't change that.

Business owners should work with qualified tax and legal professionals to understand how a second status might affect their obligations.

There can also be compliance requirements in the new country, including reporting obligations, local regulations or business registration rules.

Finally, not all programs are created equal. Some residency or citizenship-by-investment options come with high costs or changing regulatory environments. Due diligence is essential.

Where to locate

The "best" country depends heavily on your business model and long-term strategy.

Entrepreneurs with European clients or expansion plans often look to EU countries for the mobility and market access they provide. Those in industries such as manufacturing or logistics might prioritize locations with strong infrastructure and trade connectivity.

Others might focus on countries with favorable business climates, streamlined bureaucracy or access to specific regional markets.

For Americans with European ancestry, citizenship by descent can be one of the most cost-effective pathways, as it's based on lineage rather than investment. In these cases, the primary investment is time and documentation.

A different mindset

What we're seeing is part of a broader shift in how business owners think about resilience and growth.

In the past, international expansion often came later, once a company was firmly established. Today, many entrepreneurs are building with a global mindset from the outset. They are asking not just "Where do we operate now?" but "Where might we need to operate in the future?"

Second citizenship or residency is becoming one of the tools to answer that question.

Final thoughts

Not every business owner needs a second passport. For many, it might not be necessary or practical.

But for those with international clients, cross-border operations or a desire to build in more flexibility, it can be worth exploring.

The key is to approach it not as a lifestyle upgrade, but as a strategic decision — one that should be evaluated alongside other long-term business considerations.

In a world where change is the only constant, having options is increasingly valuable. For a growing number of entrepreneurs, a second passport is simply another way to create them.

Related Content

• How to Get Dual Citizenship: Pros, Cons and Steps to Take
• Setting Up a Business Abroad? 6 Mistakes to Avoid, From a Singapore-Based Financial Planner
• Considerations for Americans Who Want to Move to Europe
• What to Expect from the Global Economy in 2026
• Why 2026 Could Be the Year to Reconsider Global Diversification

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

Every day now, there is one term we seem to hear constantly on the news: Negotiation.

You would think that most lawyers would be pretty good at it, and you might even assume we were all required to take courses about negotiation in law school.

Nothing could be further from the truth, and I'm going to tell you why the just-published Never Settle: Persuasion and Negotiation Skills to Get What You Want will, in my opinion, soon knock other "negotiation bestsellers" off their pedestals and will help everyone who's looking for a commonsense, understandable, actionable guide that takes the mystery out of the negotiation process.

Plus, it's an enjoyable read.

The authors, Attia Qureshi and John Richardson, have taught at Harvard and MIT and have real-life experience with high-stakes negotiating, including hostage situations involving the FBI and negotiations in the world of diplomacy. Their outlooks provide a seriousness that's often lacking in attention-grabbing, commercially driven titles.

Also, their personalities — delightful on Zoom — are ever-present in this gem of a resource.

I'll share more of what makes Never Settle a worthwhile read in a moment, but first, here's a brief story of embarrassment, told by "Janet," an attorney and spouse of a lawyer fresh out of school. Her husband had been assigned to conduct a complicated lease negotiation at the firm where they both work.

"'James' had no experience in negotiations, but the senior partner told him to 'use our library and find things to read on negotiations.' He did that, we both met the other side in this matter, and within minutes, it was horrible. My husband just fell apart. He caved in and gave away 'the farm'!"

She asked, "Mr. Beaver, do you know of some accessible book not filled with jargon that we can read, because everything (James found) in the firm's library (focused on) complicated theory."

Janet had zeroed in on one of the greatest shortcomings of so many books that claim to "make you a better negotiator": They are filled with jargon and lack practical guidance.

And, would you believe, there are more than 10,000 books available on Amazon in the category "Negotiating - Management & Leadership," covering various aspects of business and personal negotiation.

What makes this book so different?

Even excellent books on negotiation often share a common limitation: They are primarily based on theory, and readers can be left with the illusion of having gained competence just by reading alone.

The fundamental premise of Never Settle is that we do not get favorable results by studying theory about the negotiation process but, instead, by practicing the actual skill. When you learn to, say, play golf, tennis or the piano, it takes disciplined practice — not memorizing a set of rules — to create a champion.

This approach is what makes the book a real standout. It does not leave you filled with concepts, thinking, "Yes, I get it." Only to realize, during a real negotiation, as you turn all colors of the rainbow, "I thought I could do it, but I can't."

The authors make clear that "learning about negotiation is not enough — you've got to train for it."

And that is precisely the angle the authors take, just like a coach would. In a constructive way, they take us through exercises, drills and practical scenarios applicable to everyday life.

They encourage us to "gamify" simple interactions in role-playing simulations — for example, asking for minor concessions, practicing how to refuse and listening to the persuasive power of our tone of voice.

The exercises are more than games, though. They help us develop skills that become readily available when we're dealing with serious issues. By weaving practice into the reading experience, the authors encourage us to use what we've learned, which leads to confidence, strategies and competence.

This is where the book outperforms others. Never Settle does far more than provide a knowledge basis. It serves as a training manual — with a giant dose of "Vitamin Yes, I can do this!"

Additionally, because the authors frame negotiation as a daily activity, it becomes a life skill, rather than a specialized skill reserved for lawyers or executives.

Emotional intelligence and self-awareness

Understanding your own interests, as well as the other party's, is an important feature of the book.

I can tell you from my own experience in business and family law that, when sitting down to a four-way negotiation, each side represented by an attorney, failure is virtually guaranteed if you don't have a clear understanding of the difference between what your client tells you they want and what they actually want.

The same is true for the other party. It is a matter of being self-aware, without getting hung up on tactics, strategy and pressure, and focusing instead on your client's priorities and acceptable outcomes.

The authors want us to put ourselves in the other side's shoes and work toward a fair resolution.

Where ethics and integrity matter

I have read several negotiation books that encouraged manipulation, a win-at-all-costs approach and a scorched-earth philosophy that turned my stomach. I've seen this in action, with lawyers trading short-term gains for destroyed relationships.

Never Settle is the breath of fresh air we need at this time in our country, where ethical conduct and integrity often seem to be missing. The authors preach the gospel of achieving mutually beneficial outcomes and, at all times, maintaining good faith.

For anyone who has had difficulty mastering the art of negotiation, Never Settle's exercises and can-do approach set you on a path of confidence and competence in what mankind has always done — bargain.

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

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

Business strategies, like trends, come and go. Hierarchies and debt-fueled growth were once popular until their flaws emerged.

When you're building a business, what truly lasts are the fundamental approaches that reliably deliver results and deserve every entrepreneur's focus.

Those trusted strategies aren't flashy, and they don't promise overnight success. They're grounded in fundamentals: Disciplined execution, a clear understanding of customers, prudent capital use, and leadership that values long-term growth over quick wins.

In an era obsessed with disruption and shortcuts, it's often these basics, quietly and consistently applied, that separate businesses that scale from those that stall.

Business fads that fade

Human nature leads business leaders to hunt for a "silver bullet" — the strategy that will magically cure chronic problems holding growth back. In my experience, that search is usually misguided. The answer rarely lies in the latest business fad. More often, it's found in proven approaches that have worked across cycles and industries.

Call me a traditionalist. I'm comfortable with the label. After years of advising bootstrapped businesses on how to build sustainable models, I've learned to spot the difference between flash-in-the-pan strategies and those with real staying power.

Entrepreneurs should be cautious about chasing untested ideas simply because they are trending. Novelty can be entertaining, even inspiring. But when real money, jobs and livelihoods are on the line, excitement is not a substitute for sound judgment.

A business strategy deserves the same scrutiny as any major decision: Tested assumptions, clear trade-offs and a realistic path to results.

Looking back at old business fads shows how the "next big thing" quickly fades. Six Sigma, once popularized by GE chief Jack Welch, eventually gave way to bureaucracy and lost much of its appeal.

Or quality circles, which are well-intentioned imports from Japan. On paper, they sounded like a breakthrough. In reality, they often turned into box-checking exercises that looked impressive but delivered real results only occasionally.

For a while, both approaches were treated like gospel. Books, workshops and keynote talks all promised to reinvent how business works. Companies that jumped on the bandwagon presented themselves as visionaries, proudly signaling they were ahead of the pack.

But once the buzz faded, reality set in. Leaders realized no single framework could magically transform operations or guarantee growth.

What actually moved the needle were the fundamentals: Clear goals, strong teams, disciplined execution and willingness to adapt. Those may not sound flashy, but they survive every management trend cycle for a reason.

Basics never go out of style

Here's the inconvenient truth: The things that actually work in business aren't flashy. That's exactly why they work. They demand discipline and consistency that most competitors don't sustain. These approaches are easy to grasp but tough to execute, and they require patience rather than promises of overnight turnarounds.

When you lean into fundamentals, you build something that lasts: Solid customer relationships, clear value propositions, steady cash-flow management and a culture people actually want to be part of. None of those trends on social media, but all of it shows up in the bottom line.

Companies that endure lean on basics that never go out of style. Smart cost management isn't glamorous, but it's the backbone of every resilient business. Pair that with a genuine commitment to customer experience. Not the slogan-on-the-wall version, but the everyday practice of understanding what customers need and delivering it.

Add in building and nurturing a great team, the kind that grows with your company rather than burns out chasing the newest management fad.

Finally, there's agility: The ability to read the market, respond quickly and adjust without losing your footing. None of this makes headlines. But these fundamentals drive progress long after trends fade, in every cycle.

Stay informed

That doesn't mean shutting the door on new ideas. Staying informed is part of the job. Think of yourself as a sponge. Absorb the trends, listen to the noise, sift through it all. Even the flashiest fads usually contain useful nuggets worth extracting.

But approach them like you would when buying a car. Research. Kick the tires. If you've got three kids under 10, a two-seat sports car isn't a fit. The same goes for business strategies. The question isn't whether the trend is exciting; it's whether it suits your company's needs, culture and current stage of growth.

Once you've found something worth considering, engage your team. A CEO announcing a new idea rarely changes much. You need buy-in from those who actually make things work. Consider whether your team is ready and open to change.

The fundamentals — the unflashy basics — are what really drive business success: Manage costs, care for customers, build great teams and stay nimble. Trends will always come and go, but the mistake is pretending that any are magic fixes. Prioritize fundamentals, choose trends that fit, get alignment from your team and commit to long-term execution. That's what builds a business that lasts.

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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.

Something interesting has happened in the advisory world over the past few years. Independent advisers have built strong enough brands that high-net-worth families are increasingly willing to work with them.

And many advisers, looking at the work they do for a $500,000 family, are asking themselves, "If I could do the same amount of work for a $2 million family, wouldn't that be more profitable?"

The logic is understandable. The reality is more complicated.

Moving upmarket feels exciting and strategically smart, but many advisers who pursue it without preparation may end up hurting their growth rather than helping it.

By wandering into a space they're not equipped to serve yet, they could leave behind the mass-affluent clients they were well positioned to win.

If you're thinking about making high-net-worth families a legitimate part of your growth strategy, here's what you need to consider before taking the leap.

Needs vs wants: A fundamental shift

An adviser who works with us at AE Wealth Management said it well: "When you move upmarket, you're shifting from a needs-based relationship to a wants-based one. That distinction matters more than many advisers realize."

With a mass-affluent client — someone worth $500,000 to $2 million — the value proposition is relatively clear. There are typically gaps in their plan that, left unaddressed, could materially impact their retirement security.

The call to action practically writes itself: "Your plan has these gaps, and addressing them matters." There's urgency. There's tangible risk. The client feels it.

A $5 million family doesn't feel that same urgency. If their budgeting is reasonable, markets will likely cover them. The fear of running out of money in retirement doesn't resonate the same way. What this client is really asking is, "How do I maximize what I've built?"

That's a much harder question to answer well — one that requires an entirely different approach to planning, proposals and communication.

Adopting a new skill set

The shift from intellectual intelligence to emotional intelligence becomes critical here. Technical competence matters, to be sure, but high-net-worth families also expect their adviser to understand them deeply, from their psychological profiles and family dynamics to their relationships with money.

This task may be more difficult because wealthier clients are often worse at actualizing what they want from their money. Helping them figure out their goals and how to get there is the real work.

Approach high-net-worth advising as a new business line

If you're serious about serving high-net-worth clients, don't think of it as a gradual evolution of what you already do. Think of it as adding a new line of business to your practice — because that's precisely what it is.

When advisers branch out to add estate planning or tax planning to their firms, they don't just apply their existing tools to a new problem. (At least, I hope they don't.) Instead, they build the right infrastructure for the work.

The same logic applies here. Your mass-affluent business model and the people, tools and processes that support it can stay in place. What you need to build is a separate framework for high-net-worth families.

That framework requires you to make deliberate decisions across a few dimensions:

Build a value proposition that's specific to this audience. What you offer a high-net-worth client needs to be distinct from what you offer a mass-affluent client.

The messaging, planning approach and solutions must reflect that difference.

Define your target market precisely. "High net worth" is too broad to be useful. A $5 million family looks very different from a $15 million family, and a $25 million family is a whole other thing.

Decide which segment you're targeting and put the right tools and team in place to serve them effectively.

Consider specialization. There's a meaningful difference between targeting any $2 million to $10 million family and targeting, say, engineers or entrepreneurs who fall into that income range.

If you can become fluent in a specific niche, understanding their stock option plans, psychological profiles and priorities, you bring a level of credibility that's hard to replicate.

Your client lifecycle has to change, too

Attracting a high-net-worth client is only the beginning. How you propose solutions to them, how you review their plan and how you retain them over time all look different at this level.

Proposals need to cover different ground. High-net-worth clients have access to and expect a broader range of solutions. Tax strategy plays a more prominent role.

The product mix may include private markets or more sophisticated income solutions. The proposal itself needs to reflect that expanded scope.

Reviews also need to match the promise. If your initial proposal is more sophisticated, your ongoing review process should reflect that. Clients who signed on for a comprehensive, high-touch approach need to see it delivered consistently.

Retention at this level is also relationship-driven, in a particular way. High-net-worth families place a high value on connections with people who share their life experience.

The adviser who figures out how to facilitate those connections and bring together like-minded clients creates a kind of value that goes well beyond portfolio management. You become a connector for a community, not just a collector of assets.

A note on 'new' high-net-worth clients

There's one more thing worth noting: Working with a $2 million family today is not the same as it was even five years ago.

Markets have risen dramatically, and a meaningful number of people who now have $2 million may have never expected to get close to that number. They may not have the same financial acumen or emotional relationship with wealth that a client who inherited generational money or someone who built wealth over decades may have.

Understanding where your clients fall on that spectrum matters when you're designing how to serve them.

Preparing to move upmarket

Going upmarket is a legitimate growth strategy, but it's important to be ready for the move. Advisers who win high-net-worth clients through pure inertia (a referral here, a community event there) may find themselves in client relationships they're not fully prepared to serve.

If you're willing to make the necessary changes to your value proposition, infrastructure, team and overall approach to client relationships, the opportunity is real.

If you're not, you may be better off focusing on three to five more mass-affluent families than chasing a family you're not set up to serve well.

The question to ask yourself isn't whether high-net-worth clients are worth pursuing; it's whether you're ready to build the practice that can serve them the way they expect to be served.

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• Are You the Doer or the Visionary of Your Advisory Practice? Here's How You Can Make the Leap to Chief Vision Officer

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.

Many experienced advisers eventually find that opportunities to work with ultra-high-net-worth families begin to surface more often.

Sometimes the path is gradual, as long‑standing clients accumulate wealth over decades. Other times it arrives abruptly through a referral whose balance sheet, family dynamics or business interests are already complex.

In both cases, the opportunity is often accompanied by hesitation.

The hesitation is not usually about competence. It is about structure. Advisers can worry that serving ultra‑affluent clients requires becoming something fundamentally different: A firm with far more services, deeper specialization and family‑office‑level infrastructure.

The perceived tradeoff is stark: Either remain within a familiar advisory model or rebuild the firm entirely to move upmarket.

In practice, this is often a false choice. What distinguishes effective ultra‑affluent advice is not the breadth of in‑house services, but the clarity and rigor of the strategic framework guiding them.

Complexity does not require complication

Ultra‑affluent families often do have complex financial lives. They may hold operating businesses, private investments, multiple properties and trusts, and they may have cross‑generational obligations and unique family dynamics. Risk enters their system through more channels, and the consequences of mistakes can be greater.

Advisory firms often struggle at higher wealth levels because advice delivery becomes additive rather than integrative. Planning, investments, estate planning, tax strategy, insurance and other services are often handled in isolation and not clearly connected. The firm appears more sophisticated, yet the advice itself can feel less coherent.

As wealth increases, complexity can reduce clarity, constrain effective decision‑making and lead to unintended outcomes.

Affluent households benefit from frameworks that organize tradeoffs, clarify priorities and provide context for each decision.

Standardize best practices and still deliver bespoke advice

Every client can benefit from customization. However, the way advisers think about wealth, risk and tradeoffs can remain consistent across households.

Advice and the client experience can be elevated when the language used to explain decisions is stable and the process by which choices are evaluated is repeatable and deliberate.

Judgment, however, should reflect each client's unique situation. Solutions should reflect each family's distinct priorities and preferences. Clients' balance sheets, constraints, family dynamics and objectives all benefit from tailored solutions.

Personalization is applied to specific decisions made within a consistent, standardized advice framework. This distinction allows firms to deliver deeply personalized advice without creating operational chaos.

Total wealth as the organizing structure

A total wealth framework can provide a stabilizing structure that allows advisers to move upmarket effectively.

Total wealth extends far beyond investable assets. It includes homes and mortgages, operating businesses, private investments, human capital, pensions, Social Security, insurance, expected estate transfers and future cash flows. Each element carries different risk characteristics, liquidity constraints and timing considerations.

Viewed in this broader context, the investment portfolio becomes just one of many components contributing to desired outcomes. Its value is elevated when treated as flexible capital — a "completion fund" designed to balance risks and opportunities embedded elsewhere in the household's financial structure.

Within this framework, risk management becomes structural rather than statistical. Instead of relying on probability‑based forecasts, advisers can use reserves, hedges, insurance, diversification and flexibility to reduce the consequences of adverse events.

Structural risk management recognizes that while we cannot change future events, we can change how they affect people.

This approach also supports scalable advice delivery. The underlying logic does not change as wealth increases. What changes is the number of moving parts and the potential consequences of poorly coordinated solutions.

Wealth allocation before optimization

Once total wealth is understood, the next step is to clarify purpose. Many affluent families already feel they have "enough," which can make goals-based and optimization‑oriented conversations feel less relevant.

Wealth allocation can offer a more compelling entry point. The conversation starts with intent: How does the family want to allocate its wealth across lifestyle, family priorities and broader impact?

This empowering framework encourages intentionality without relying on scarcity. It helps distinguish essential spending from important objectives and discretionary uses of capital. Tradeoffs that might otherwise remain implicit or emotional become explicit and manageable.

From this foundation, strategy follows.

• Asset‑liability matching can align total wealth portfolios with layers of spending and resource needs
• Estate structures can be designed more clearly to support the intended flow of wealth across generations
• Insurance can protect what must not fail
• Tax strategies can align with how wealth is meant to be used, not merely how tax liabilities can be minimized

Complexity is introduced only when it serves a clear purpose.

Importantly, this is personalization that scales. The framework remains consistent, while each family's allocation and resulting solutions reflect its unique priorities.

The virtual family office delivery model

Delivering this level of integration does not require building a traditional family office. Rather, it requires adopting a family office mindset. A virtual family office model places strategy at the center of the client relationship.

The adviser leads with comprehensive, integrated advice. Planning, investments, risk management, estate planning, tax and other domains are coordinated through a single strategic framework.

Execution can remain distributed. Attorneys, accountants, insurance specialists and other professionals are engaged as needed, but they operate within a shared framework rather than in silos. The adviser acts as the architect and integrator, without needing to own every capability in‑house.

This model scales precisely because it is disciplined. The client experience feels elevated not because more services are delivered, but because the advice is clearly structured, empowering and intentional.

Advisers can position themselves as wealth strategists who design systems rather than simply manage parts.

Ultimately, extending an advisory model upmarket is less about adding services and more about strengthening the strategic core.

Strategy becomes a distinct function, complexity is managed deliberately, teams align around shared frameworks, and advisers focus their judgment where it matters most.

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• Ten Ways Family Offices Can Build Resilience in a Volatile World
• Do You Need a Family Office? Four Signs for the Very Wealthy
• Create a Family Dynasty for Lasting Security
• Why Venture Investing Could Be a Win-Win for Family Offices

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.

Every business owner eventually leaves their business. It's preferable to leave it on your own terms, confident that the business can continue to thrive after you've stepped away.

The key to getting there is to start planning your exit long before the day you anticipate handing over the keys, which gives you time to map out your ideal business exit.

Talk succession before it's an emergency

Start your business exit planning three to five years before your exit, which gives you options you won't have if your exit is a panicked scramble.

Too many business owners wait until health or burnout forces the process to begin. Beginning the process before your exit allows you to look at things objectively and to be more thoughtful in your planning.

With years of preparation, you're able to take a critical look at your business and its trajectory, helping you to understand the best path forward for you and your business.

It also gives you ample time to enlist the help of a Certified Exit Planning Adviser (CEPA®) to guide you toward a successful exit.

With this critical look, you can also scrutinize who'll best fill your shoes. You might have someone in mind, but if you haven't had that conversation, they might not know you assume they'll succeed you.

Conversely, there might be people close to you who assume they're next in line to own the business, and unless you tell them otherwise, you might be in for some awkward conversations.

Family doesn't equal fit

Succession doesn't always follow a bloodline. Nobody is entitled to inherit your business if they aren't the best fit to lead the business.

Primogeniture, or the system in which the eldest child automatically takes the reins of a business after the parent steps away, was once so common, it was expected, but that precedent was set by a society that ran very differently than our society now runs.

There might be someone more suitable to take over your business than your child, sibling or other relative. Whether that's an outsider or someone already working within the business, it's a decision that should be made early so succession conversations can start long before your exit.

Try not to focus too much on a family "legacy." Sometimes, the best legacy is success and financial freedom — not a business staying in a family name.

Separate roles from relationships

A business run on emotion rarely survives its founder. Though it's likely true that you have a lot of love for family members who work at your business, it's important to look at your professional relationship with them through the lens of a successful business owner.

Clear job descriptions, fair compensation structures, and reasonable expectations should all be in place for all employees — related or not.

Preferential treatment to a relative can create a work environment where the relative takes advantage of the business, not giving the effort that should be given.

It can also create a work environment in which the other employees feel resentment for having to put in adequate effort when related employees don't.

When considering who within your business might be the best fit to take over the business upon your exit, examine the merit and leadership potential of each employee instead of considering how close their branch of the family tree is to yours.

Know your number and your tax plan

Exiting a business can't be the act of handing over the keys and walking away. There is a great deal of preparation that should happen to ensure you get the best price while also giving the business the best odds of continuing to prosper after your exit.

You need a solid exit plan, including a suitable tax strategy, regardless of who buys your business. Your tax strategy is a pivotal aspect of your business exit plan. Truth be told, the amount you keep after taxes often matters more than the amount for which you sell your business.

It's not something you should try to navigate on your own. Even if you managed to navigate the ins and outs of growing a business on your own, your exit should include a trusted guide.

An experienced exit-planning professional will guide you through the labyrinth of exit planning, including the process of obtaining a valuation, securing a buyer, getting a tax plan in place and moving into the next phase of retirement, if that's what's next for you.

Legacy isn't ownership; it's impact

When you first started your business, you might have had dreams and visions of a legacy in which you passed the business down to your children, who would later pass it on to their children, and so on. While that's an admirable legacy, it isn't the only route to a legacy.

Your legacy can be about what you built. It's not about who controls the business after you exit. Instead, focus on the purpose and culture you built and celebrate the continuity of that culture after you step away.

Careful planning and preparation will reveal if your family member is truly the best option to take over the business.

Remember that sometimes, doing what's best for the business is indeed what's best for the family, and vice versa. You're not obligated to pass your business to someone who won't usher it into its next phase of success, even if they're expecting you to.

Do what's best for you and your business, and enjoy the legacy you built.

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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.

Editor's note: This is the first in a series of articles on the planning considerations and decisions that business owners face over the lifecycle of creating and running a company.

When starting a business, one of the most important things to consider is how it will end. Whether you'll sell the business, step back and let your children or employees run it (or buy it from you), or just shut it down when you are tired of running it, thinking about the possibilities now will help you decide how to structure your business from the beginning.

And while it's impossible to know for sure what you'll eventually do with the business you're starting today, considering these details at the outset should ensure smoother sailing if problems arise as the business evolves.

1. What is the best way to structure and own your new business?

One of the first decisions to make is how to organize the business. There are several options, and without proper advice, some important considerations may be missed.

Organizing a business as a sole proprietorship, a corporation, a partnership, a limited liability company or an S corporation will have tax effects:

• Sole proprietorship. This is the simplest way to own a business, but it offers no liability protection, and the owner will be taxed on the business income and potential benefit from start-up losses.
• LLCs and limited partnerships. Offer liability protection with pass-through taxation and some flexibility over tax elections and potential benefit from start-up losses.
• C corporations. Offer liability protection, but profits must be taxed at the corporate level and again when distributed to owners.
• S corporations. Offer liability protection with pass-through taxation to avoid double taxation and potential benefit from start-up losses.

These tax effects will impact the operation of the business and, if the business is eventually sold, the way the sale will be treated from a tax perspective. It is therefore important to consider the possible outcomes associated with your choice of entity:

• What will your decisions do to your income tax liability — federal, state and local?
• Will an eventual sale of the business lead to capital gains tax treatment or ordinary income tax treatment?
• Will you have an entity-level income tax and a personal income tax liability from business earnings, and how will any losses be recognized?
• Are there approaches that provide tax advantages upon exit?

When a business is sold, the gain is often subject to tax. Depending on the structure of the business and of the sale, some may be taxed as capital gain and some may be taxed as ordinary income.

However, there are approaches to organizing the business at the outset that can mitigate the impact of these taxes.

One is organizing the business under the qualified opportunity zone rules, and another is organizing it so that it qualifies for the qualified small business stock exemption.

Both programs were enhanced or extended through the recent One Big Beautiful Bill Act (OBBBA), and if tax savings on sale is of interest, you should engage advisers to assess the viability in your particular situation.

There are planning techniques to minimize the taxes paid after the initial company setup, as well as before and even after the sale of a business, and some of those will be addressed in a future article in this series.

2. When starting a business with co-owners, how will you deal with conflict?

It is common for unrelated persons to start a business together. This makes sense for lots of reasons, not least of which are:

• No one person knows how to do everything
• Spreading ownership among multiple people means spreading the start-up and operating expenses of the business among them, thereby reducing the initial financial burden

However, sharing ownership with non-family members can also create complexities that you should consider at the outset of your journey. Thinking about possible conflicts before they occur often leads to a better outcome when conflict happens.

So, include provisions that address how you want to control and resolve conflicts.

For example, if the co-owner(s) of your business want to cash out at some point in the future, how do you want this to unfold?

Many business owners will include provisions that require the exiting owner to offer their ownership interest to the other owner(s) first, subject to a process that is contemplated in the governing agreement.

These provisions may include a methodology for valuing the ownership interest, payment provisions and permissible successor owners of that interest.

These provisions may also control how an owner may give their interest to others, and whether another has a first right of refusal if an owner wishes to give some of their interests away to family members, for example.

3. What are the tax benefits of transferring or gifting part of your business early on?

If you feel like the business will have significant value at some point — and after all, who doesn't think this when you start a business? — you may wish to consider transferring some of the business ownership interest to trusts for the benefit of your spouse, children and/or grandchildren.

The reason for doing this early is that the business will likely be valued at the lowest amount when you start it. Why does this make a difference? When you give something away — to a trust or outright — there is a federal gift tax on the value of what you have given away.

Often, this does not require the donor to pay a tax for the gift because everyone is entitled to a certain amount they can give away to a non-spouse free of federal gift or estate tax (gifts to a spouse are typically exempt anyway).

This amount is often referred to as the "unified credit amount," and, beginning in 2026, this amount is $15 million per person.

This means that you may give up to $15 million away during your lifetime before ever paying a federal gift tax, and if there is any unused unified credit amount at the time of your death, you may give the rest away after you die when property you own is passed by title, by operation of your last will and testament or by revocable trust, or by beneficiary designation.

4. When should you create a business succession plan?

Who should run the business when you no longer want to do so? Should those same persons own part of the business?

While it may be difficult to decide who will run your fledgling business when you eventually retire, this is worth considering as early as possible.

• Keep it in the family. If you believe your spouse, children and grandchildren will take over where you leave off, it may make sense to hold business ownership interests (or some of these interests) in a trust that benefits the entire family as a way to keep the business "in the family."
• Outside ownership with family control. If you believe that you will transfer control of the business to unrelated persons and you still want your family to benefit financially when you are no longer in charge, you may want the operating agreement to include provisions that directly address who controls the business, irrespective of who owns the business.
• Selling the business to a third party. If you think you will eventually position the business for sale to a stranger, you may want to incorporate some provisions in the operating agreement that will permit gifts of discounted ownership interests to family members or a trust that benefits family members at the outset, thereby enabling discounted gifts to family, who will then share in the sales proceeds outside of the owner's taxable estate.

Most of these decisions can be revisited and changed later, but thinking about the possibilities now may lead you to incorporate some thoughtful provisions into agreements that will benefit you and your family in the future.

5. What happens if an owner of the business dies or becomes disabled?

As uncomfortable as it may be to consider, what do the owners do if one of the co-owners dies or becomes disabled and unable to perform the duties they used to perform?

Lawyers, accountants and other advisers will tell you what they ordinarily see in these circumstances, but if you and your co-owners can imagine another solution, an attorney can draft for it.

The importance of these provisions cannot be underestimated. Although you are excited to go into business with your co-owner, would you feel the same way about operating the business with their spouse? How about their kids or a trustee of a trust for those kids?

Similar to the provisions that address the co-owner who wants to cash out while alive, provisions that address what happens when an owner dies should be contemplated as you begin to build a business.

You do not want the equity — financial and sweat equity — that you put into the business jeopardized by the untimely death of your partner. And frankly, your partner's spouse may not want to work with you either.

As fun as it is to start a business, do not ignore the details. Left unaddressed, the details can create fissures in the business — or break it entirely.

Christopher F. Tate, J.D., Partner and Wealth Strategist at Fidelis Capital, has nearly 30 years of experience and specializes in wealth planning, advanced estate planning and cash-flow planning, delivering comprehensive strategies to Fidelis Capital’s UHNW families and institutions.

Rick Simonetti, Founding Partner, CEO and Head of Wealth Planning at Fidelis Capital, is a deeply experienced expert on integrating wealth planning, family dynamics and tax management into financial decisions and advice. His visionary leadership is guided by nearly 35 years of industry experience.

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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.

Harlan couldn’t tell you much about retirement. He didn’t exactly retire in the traditional sense. But he could teach you a lot about self-reliance and determination – traits more older adults are putting into practice today.

He needed both when he started his business. After all, he was 65. But people loved what he was cooking up, so he kept going. Soon, he wasn’t just Harlan. He was Colonel Sanders, founder of Kentucky Fried Chicken.

It’s a familiar story now, and one that more people seem eager to follow.

The title "Founder" on LinkedIn jumped by 69% in 2025 and is up 300% since 2022. Driven by layoffs and economic uncertainty, many professionals are rebranding freelance or consulting work as entrepreneurship.

And while it may seem like a younger person’s game, it’s increasingly common among older adults.

Workers in their 50s and beyond often face challenges finding or keeping traditional jobs, but they’re also living longer, wanting to stay engaged and, in many cases, needing additional income. These older entrepreneurs share many of the same motivations as younger ones: autonomy, flexibility and meaningful work.

Research indicates that about 30% of Americans in their 70s, roughly 1.3 million people, are self-employed. And many are succeeding. According to a 2020 study, a 60-year-old who starts a new business is three times more likely to succeed than a 30-year-old.

But, what happens when you stop? Does becoming a founder help or hurt your retirement?

Whether you’re doing it out of necessity or interest, before you change your LinkedIn title, it’s worth thinking about how your retirement plan may need to change along with it.

The cost of the founder title

Stepping out on your own can feel exciting, full of possibility. But it also means leaving certain things behind.

David Haas, CFP® and founder of Cereus Financial Advisors, established his RIA at age 55 and says the transition can work well if it’s intentional.

"I think it can work out great if it’s done for the right reasons and the founder has considered the option of working for someone else," he says.

What can be overlooked are the trade-offs. You may lose employer-sponsored benefits, including a 401(k) match, health insurance and other forms of compensation. You’ll also be responsible for self-employment taxes and funding your retirement entirely on your own.

In other words, thinking about what you could lose is just as important as what you could gain.

As Natalie Pine, CFP® and managing partner at Briaud Financial Advisors, notes, "Potential mistakes of self-employment later in life typically involve spending money on a dream that drains resources and doesn’t amount to much."

And the costs aren’t just financial. Many traditional jobs provide structure, community and mental stimulation — things that can be easy to overlook until they’re gone.

"Your new venture needs to address those needs intentionally," Mitchell Kraus, CFP® and founder of Capital Intelligence Associates, says, "or you'll find yourself working just as hard for half the income with none of the fulfillment."

Your new retirement toolkit

The good news is that self-employment comes with powerful retirement savings options, often with higher contribution limits than traditional plans.

"The financial mechanics of becoming a solopreneur later in life are actually very solvable," says Kraus.

What works best depends on your income and the consistency of your cash flow. As Haas explains, "If the founder still has to save more for retirement, then it’s vital that they try to do so from the company’s cash flow. The best method will vary by company. The SEP IRA is simplest, and then the Solo 401(k). A defined benefit plan will require a consistent cash flow that few founders can immediately support."

A SEP IRA allows you to contribute up to 25% of your compensation (effectively about 20% of net earnings) or a maximum of $72,000 for 2026, whichever is less.

A self-employed 401(k), or Solo 401(k), functions much like a traditional employer plan, but allows you to contribute as both the employee and the employer. In 2026, total contributions can reach up to $72,000 for those under 50. Catch-up contributions add another $8,000 for those ages 50 to 59 and 64 or older, while those ages 60 to 63 can contribute up to $11,250 more if the plan allows.

For high earners, the difference can be meaningful.

"For those wildly successful," Pine says, "we see tremendous potential to enhance retirement savings with the opportunity not only to maximize a defined contribution plan like a Solo 401(k) but a defined benefit plan in addition if they are self-employed. If they add employees, they can start a new comparability plan that can max [out] owner deferrals based on age while providing a modest retirement for other employees."

Health insurance: The biggest wild card

If there’s one area that consistently catches new founders off guard, it’s the cost of health care. Haas describes it as "one of the biggest thorns."

For those between 55 and 65, the challenge is the Medicare gap. Without employer coverage, many founders must rely on COBRA, a spouse’s plan or the ACA marketplace.

"I was on COBRA when I first started," Haas says, "and then transitioned to a MEWA plan available in New Jersey. In many states, an option like this is unavailable, and you have to look to a spouse’s plan or the marketplace, often at very high cost."

Pine adds that age plays a major role in planning. "Older founders are typically closer to Medicare age, so they need to make sure any plan they adopt accounts for that transition," she says. "Most solopreneurs we work with either use an ACA plan or a spouse’s insurance until they turn 65."

Is your business an asset — or just a job?

Another important question is how you view your business over time. Is it something you’re building to sell or simply a source of income?

In Haas’s experience, most fall into the latter category. "Very few of these companies can be later sold for anything above assets," he says. Many are built around consulting or solo work, meaning the income stops when the founder stops working.

That makes it less of an asset and more of an income stream, something to factor into your broader retirement plan.

For those hoping to build a sellable business, more intentional planning is required, including how the business is structured.

Pine notes that this can have significant implications. "You need to be very thoughtful about entity structure," she says, "as there are meaningful tax benefits if there is significant success down the line."

The psychological trap of the founder identity

For some, the biggest challenge may not be financial, but psychological.

When you build something yourself, it can become part of your identity. That can make it harder to step away, leading to the familiar refrain: "Just one more year."

At the same time, research shows that too much unstructured time doesn’t necessarily lead to greater happiness. Many people derive a sense of purpose from being productive and contributing. That tension can keep founders working longer than they originally planned.

Still, it’s that kind of passion that can make these ventures worthwhile in the first place.

As Pine puts it, "We would only encourage someone to start a business later in life who is passionate about what they are doing. They will have a longer runway that way and enjoy their time even if it isn’t fruitful."

Chances are you’re not building the next KFC. But if your later years are about pursuing something meaningful, becoming a founder might not be such a wild idea after all.

Take it from the Colonel himself: "I just say the moral out of my life is don't quit at age 65, maybe your boat hasn't come in yet. Mine hadn't."

Read More

• Best Jobs for Retirees
• Retirees' Guide to Dos and Don’ts of Business Partnerships
• How Five Retirees Turned Their Passion into a Business
• Things that Surprise Business Owners When It’s Time to Sell

In the financial advising world, success isn't just about production. It's about people: The clients who trust you to guide them through life's biggest financial decisions.

Building strong relationships with your clients is more than just a nice-to-have; it's the secret sauce that can set you apart in a crowded industry.

One of our advisers, Dale Smothers, founder of R.D. Smothers Wealth Management in Campbellsville, Kentucky, and a Kiplinger contributor, puts it this way: "We are in the relationship business, not the sales business. If you view yourself as a relationship manager, things get a whole lot easier on the back end."

By focusing on meaningful, personalized, branded touchpoints, Smothers has created a client experience that not only strengthens relationships, but also helps his firm stand out from the competition.

Strong relationships: Your best investment

As Smothers' comment suggests, trust is everything. Clients want someone who understands their goals, values and dreams — not some impersonal investment picker who just manages their money. That's why strong relationships are the foundation of a thriving practice.

But relationships aren't just about connection — they're also about perception. Every interaction with a client is an opportunity to reinforce your brand and remind them why they chose you. From the tone of your emails to the design of your newsletters, your brand is always communicating.

Here's how great client connections and a strong brand can transform your business:

Retention and loyalty. When clients feel valued and understood, they're more likely to stick with you, even during market turbulence or life changes

Increased assets. Satisfied clients are more inclined to entrust you with additional assets as their wealth grows and their financial needs evolve

Referrals and advocacy. Happy clients spread the word. They'll refer friends and family and become vocal advocates for your services

By investing in your relationships and your brand, you build long-term success.

Strategies to 'wow' your clients

Great relationships don't just happen. They're developed through consistent, thoughtful actions that show clients you care and remind them of your unique value.

The good news? You don't need a massive budget or endless hours to make a lasting impression. Small, meaningful gestures — especially branded ones to reflect your identity — can go a long way in creating connections that clients remember and value.

Here are some strategies to help strengthen your client relationships and keep your brand top of mind:

1. Celebrate milestones. Recognize birthdays, anniversaries, retirements and other significant life events with personalized cards or small gifts. Branded touches, such as a card with your logo or a gift box featuring your firm's colors, make these moments even more memorable.

2. Send personalized newsletters. Regular newsletters tailored to your clients' interests and financial goals keep them informed and engaged. Include updates about your firm, market insights and even personal stories or staff celebrations to add a human touch.

Branded newsletters reinforce your identity with every mailing.

3. Offer educational resources. White papers, guides and other educational materials can position you as a trusted professional while providing real value to your clients.

Adding your logo and branding to these materials helps ensure your knowledge is always associated with your name.

4. Host client events. Invite clients to exclusive events, such as seminars, appreciation dinners or webinars. These gatherings foster a sense of community and provide opportunities for deeper connections.

Branded invitations and event materials can elevate the experience and leave a lasting impression.

5. Stay consistent with touchpoints. Regular communication — whether through emails, phone calls or mailings — keeps your brand in clients' thoughts and reinforces your commitment to the relationship.

The power of personalization

Smothers has seen firsthand how personalized, branded marketing can transform client relationships. His firm uses Advisors Excel's Print on Demand service to deliver customized newsletters, milestone cards and other branded materials that resonate with clients in a meaningful way.

"Clients often mention the joy of receiving something in the mail that feels relevant and heartfelt, not just another generic update," he says.

These gifting and communication efforts have also helped R.D. Smothers Wealth Management stand out in a crowded market.

Smothers notes that "the majority of prospects who come into our firm before they become clients are leaving their adviser because they feel like they're not cared about or don't have a relationship with that company."

By consistently engaging with clients in a personalized and authentic way, Smothers' team has built a loyal client base that not only stays but also advocates for the firm.

Executing these strategies doesn't have to be time-consuming, either. Services such as Print on Demand simplify the process, allowing advisers to customize and order branded materials, from guides to gifts and invites to informative events — quickly and efficiently.

Stronger bonds, stronger business

In the end, the effort you put into developing and maintaining client relationships pays off — not just in loyalty and retention, but in referrals, advocacy and long-term growth.

By focusing on personalized, consistent communication and leveraging the power of your brand, you can gain clients for life and build a practice that thrives on trust, connection and a strong identity.

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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.

Young professionals are increasingly building new lives and businesses overseas, drawn by the lifestyle, affordability and opportunity that foreign countries offer.

Increasing numbers of U.S. taxpayers are launching start-ups and consulting firms (paywall), opening cafés and running small tourism ventures everywhere from Mexico to Portugal and Vietnam.

But while the dream is compelling, the reality is complicated.

The U.S. is one of the few countries that taxes its citizens on worldwide income, meaning new ventures abroad are still very much entangled in the U.S. financial and legal systems.

That's where financial advisers come in. American clients living and working abroad don't just need an investment plan — they need someone who can guide them through the cross-border maze. U.S. CFP® professionals who also live and work abroad are in a unique position to support them.

Here are six of the most important ways they can do so.

1. Entity selection abroad

Forming a limited company in Portugal or registering as self-employed in Hong Kong carries major implications for U.S. taxes. Without planning, clients can end up paying far more than they need to.

Our firm, which is based in Singapore, advised a client who had set up a luxury travel company there. She had chosen a local corporate structure without U.S. input and triggered thousands in additional annual tax liability due to global intangible low-taxed income (GILTI), a U.S. tax on certain foreign earnings of American-owned companies.

We analyzed the U.S. tax consequences of her current business structure and determined the most tax-efficient way to restructure the business from a local and U.S. tax perspective.

2. Navigating retirement savings across borders

Clients are often unsure whether they can keep saving in U.S. retirement accounts when they earn money abroad. Exclusions, treaties and local pension schemes can make things complicated.

One entrepreneur we worked with in Malaysia discovered the mandatory local pension contributions to the country's Employees Provident Fund weren't recognized for U.S. tax purposes as a pension but as taxable income instead.

We helped him restructure the business income to be considered U.S.-based so he could also fund a solo 401(k) and contribute to Social Security.

3. Coordinating estate and succession planning

Many expat entrepreneurs hope to build family businesses, but estate laws abroad can derail succession plans. France, Spain, Portugal and other countries implement "forced heirship" rules that override U.S. wills.

A café owner in France assumed she could leave her shares freely to her spouse. But French law guaranteed her that her two children would receive a large share of the inheritance along with her husband. By coordinating with a local attorney and a cross-border French/U.S. tax firm, we helped her design a plan that respected both her wishes and local law.

4. Managing banking and currency risks

Entrepreneurs abroad know that juggling multiple currencies can affect profitability. Exchange-rate swings, foreign transaction fees and local banking restrictions can eat into margins.

Advisers can help clients set up multi-currency accounts, hedge currency exposure, actively manage cash and educate them to reduce friction when moving money between countries.

5. Spotting overlooked risks

Small business owners abroad face insurance, liability and social security obligations that aren't always obvious.

For example, one client who started a medical consulting firm in Singapore thought that his U.S. liability umbrella policy would cover his risks globally. Advisers can flag these exposures and connect clients with local professionals to close the gaps.

6. Not relying on a single U.S.-based adviser

The most effective model is a coordinated team: A U.S. cross-border adviser who lives and works where their clients are located, paired with local attorneys, expat accountants and specialist consultants. Your adviser back home doesn't fully understand the challenges expats face day-to-day. Things that may be simple in the U.S. become complex abroad.

We worked with an entrepreneur who initially hoped to "keep it simple" with one U.S. based adviser. But once we brought in a local expat accountant and an attorney with global specialization, the tax and legal structure fell into place, saving money and avoiding major compliance risks.

Acting as anchors for clients

Advising clients who start businesses abroad is the next frontier of financial planning.

For these clients, U.S. qualified local financial advisers are anchors, helping globally mobile entrepreneurs steady their finances, navigate competing tax systems and protect the legacies they're working to build.

The American dream is increasingly lived out across borders. Advisers who recognize that shift will guide the next wave of clients who chase opportunity abroad.

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

In the rapidly evolving landscape of artificial intelligence (AI), businesses are increasingly integrating these tools into daily operations to boost efficiency and innovation.

From automating hiring processes to generating content and analyzing data, AI promises significant advantages.

However, when employees improperly use AI — such as by inputting sensitive data without safeguards, relying on biased outputs or failing to oversee automated decisions — companies can face substantial civil liability.

Under such principles as vicarious liability, businesses are often held accountable for employee actions within the scope of employment.

In this article, we explore key areas of exposure, drawing on recent legal developments (as of February) and offer insights for mitigation.

Discrimination and bias: The forefront of AI litigation

One of the most prominent risks arises from AI-driven discrimination, with tools perpetuating biases in hiring, promotions or evaluations.

Employees might deploy AI screening software without auditing for fairness, leading to disparate impact claims under laws such as Title VII of the Civil Rights Act, the Age Discrimination in Employment Act or the Americans with Disabilities Act.

For instance, in the landmark Mobley v. Workday case (2024-2025), a plaintiff alleged that Workday's AI hiring platform discriminated against applicants based on age, race and disability, resulting in a certified collective action for applicants age 40 and older.

Similarly, the 2025 Harper v. Sirius XM Radio lawsuit claimed AI tools used proxies such as ZIP codes to exclude Black applicants, highlighting disparate treatment and impact.

Recent settlements, such as EEOC v. iTutorGroup (resolved in 2023 but influencing 2025 cases) underscore how automated rejections of older candidates can lead to hefty penalties, including $365,000 payouts. Businesses face damages, back pay and injunctions if employees neglect bias audits.

Privacy violations: Data mishandling in AI applications

Improper AI use can breach privacy laws when employees feed personal data into unsecured tools.

This exposes companies to claims under the California Consumer Privacy Act, General Data Protection Regulation or the Fair Credit Reporting Act. A groundbreaking 2026 lawsuit against Eightfold AI alleges the company's platform compiles applicant data from sources such as LinkedIn without consent, treating it as unregulated credit reports.

Employees inputting employee or customer information into public AI chatbots risk class-action suits for invasion of privacy or data misuse, with penalties reaching millions.

Emerging regulations, such as California's 2025 Civil Rights Council rules, expand liability by defining AI vendors as agents of employers, emphasizing the need for consent and security.

Intellectual property and defamation risks

Employees generating content via AI might infringe copyrights if outputs derive from protected materials, leading to secondary liability under the Copyright Act.

Additionally, AI-produced reports or communications containing falsehoods can spark defamation claims.

For example, if an employee publishes misleading AI-generated social media posts, businesses could face compensatory damages.

Negligence, contract breaches and deceptive practices

Negligence arises when faulty AI deployment causes harm, such as erroneous financial advice or operational errors, invoking product liability for defective tools.

Breach of contract occurs if AI fails to meet client standards, while deceptive practices under the FTC Act penalize misrepresenting AI capabilities — fines and refunds ensue.

Mitigating the threats

To shield against these liabilities, businesses must implement robust AI policies:

• Mandatory training
• Bias audits
• Human oversight
• Compliance with laws such as New York City's Local Law 144 or the proposed No Robot Bosses Act (2024)

As AI litigation surges — evidenced by cases such as Eightfold and Mobley — proactive measures are essential. By fostering responsible use, companies can harness AI's potential while minimizing legal pitfalls.

In the next article, we will explore strategies companies can employ to insulate selected company assets from civil liability from unforeseen, unexpected lawsuit creditors and predators.

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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.

Meta raised eyebrows in December when it was reported that the social-media giant would pay upwards of $2 billion to acquire Manus, a small agentic AI company out of China — an eye-popping price that many critics have since decried as an overpay.

But one man's overpay is another's opportunity, and sellers that get too caught up in valuations of their company based on comparables — rather than creativity — risk losing out on huge upsides and leave millions of dollars on the table.

The problem with comparable company analysis

The use of comparable sales to value companies as they enter the M&A market has become standard practice thanks to a market that's been built by and around financial buyers — savvy readers of the market but often also individuals that are limited in their approach to valuations.

To these financial buyers, businesses' values are summarized through a series of calculations based on assets, EBITDA, and comparable transactions — in other words, mathematical past performance instead of future integrated values.

It's a system that keeps deals flowing, but also one that rewards backwards-looking certainty over forward-looking possibility.

Rather than understanding the value of a company as being the amount a buyer is willing to pay, the value of a company is predetermined, based on what buyers have paid for similar companies in the past.

The issue with this valuation process ignores a simple truth: A business is worth different amounts to different buyers, depending on what they can do with it.

Strategic buyers routinely pay materially higher takeover premiums than financial buyers for the same kind of asset, precisely because they are underwriting synergies that will never show up in a standard multiple screen.

Sellers who don't think through those differences in advance inevitably under transact on what they have to offer.

What could your business be worth to the right buyer?

The tendency to look backward as owners position their companies for a sale is a significant part of why so many founders report walking away from their exits with a sense of regret — up to 75% in an Exit Planning Institute survey.

Even when the transaction looks successful on paper, it can soon feel like a missed opportunity for owners who have committed so much of their life, their talent and their capital to building a company.

Rather than being a practice in calculation and comparison, M&A should be a practice in creativity and strategy as sellers consider what their business could be worth in the hands of the right buyer.

It's the difference between selling an apple orchard for its value as an apple orchard where people can come and pick fruit in the fall, vs selling an apple orchard to a snack manufacturer who wants to be able to source their produce in-house.

The value of the orchard is real either way, but the assets are worth significantly more to one buyer than the other.

Valuations grounded in what businesses have historically produced assumes any additional value is speculative — which is often not the approach buyers have in coming to the market.

Buyers who consistently capture post-acquisition upside invest time and resources in understanding how an asset could be repurposed, scaled or embedded in a larger system.

Comparables and EBITDA may not say that Manus is worth $2 billion today, but in the context of Meta's race to dominate AI, it may well be.

Reframing the valuation process

Whether it's because of what they offer in a given technology, geography, or service niche, companies are regularly able to outperform what comparables say they should fetch by approaching the market with a more strategic approach.

To the right buyer, a chemical manufacturer in the right geography can sell for 100% more than even its owners expect.

Instead of asking, "What is my business worth?" owners should ask, "Who should own this business next and why would it be worth more in their hands than in mine?"

That question reframes the entire process. It forces a deeper examination of the company's underlying capabilities rather than just its current outputs.

Answering it requires stepping outside the role of operator and thinking like a strategic acquirer.

• What capabilities does the business have that could be amplified inside a larger platform?
• What customer relationships, processes or intellectual assets could unlock new revenue streams elsewhere?
• What constraints disappear when the business is no longer standalone?

The irony is that this approach often leads to better outcomes for both sides. Sellers capture more of the value they created. Buyers enter the deal with clearer expectations and a more realistic path to execution.

Fewer assumptions are left unstated. Fewer opportunities are discovered only after closing.

Businesses inevitably change hands. But whether the exit rewards the seller who built the asset or the buyer who recognizes its utility depends on who does the strategic work first.

The owners who come out ahead are the ones who start early, get clear on how their company could be worth more to the right buyer than it is to them, and assemble the team to turn that insight into leverage.

That's how owners walk away with a deal that reflects the full value of their business — not just the market they happened to sell into.

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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.

Famed investor Michael Burry is once again raising the alarm about an AI bubble, as return on invested capital slows and OpenAI declares a "code red" amid increased competition.

But the market bubble is only one side of the story. A bubble of equal size — and perhaps greater concern — is forming around AI "adoption," as board-facing messaging becomes increasingly detached from the realities of corporate AI implementation.

The growing market bubble around tech companies has long been a concern for investors and analysts, who see striking parallels between the valuations of today's AI companies and those of companies that were breaking records when the dot-com bubble burst.

But this emphasis on market prices has the corporate world ignoring the expectations bubble that's been growing right under their noses.

Fear of missing out (FOMO) and market-led urgency have businesses jumping at opportunities to show investors that they've adopted AI into their business operations. According to McKinsey, 88% of business leaders in 2025 reported regularly using AI in at least one business function — up from 78% the year prior.

While AI devotees see these numbers as evidence that AI is living up to its potential and transforming the economy, a deeper dive into the figures paints an alarming picture.

McKinsey identifies just 6% as "high performers" — those seeing 5% or more of earnings before interest and taxes (EBIT) attributable to AI. Meanwhile, only 39% of respondents report any enterprise-level EBIT impact from AI, with most of those seeing less than 5%.

Even for those only watching the market bubble, that should be a concern. Capital is being priced right now as if companies are seeing gains from their AI use. If companies fail to turn AI into an additive venture, that reality will eventually hit the market.

Yesterday's data weakness, today's AI failure

The biggest problem in the AI market right now is that AI actually is as powerful as it promises to be. An effectively trained AI can (and will) transform the operations of a well-prepared business.

The issue is that most businesses aren't prepared.

While AI scores highly on the factors that make it an adoptable technology (relative advantage, observability and trialability), it scores weakly on the remaining two factors: Compatibility and complexity.

Actually building effective AI into workflows requires vast amounts of training, discipline and data that most companies simply don't have — because most companies have failed to adopt AI's precursor technologies.

For many businesses, cloud computing has been a failure. Regardless of the size or sophistication of a business's enterprise resource planning (ERP) or customer relationship management (CRM) systems, most companies never develop the discipline to ensure data consistency.

What's driving the AI implementation bubble is that those same companies are now trying to bolt AI onto an unstable foundation. And AI, unlike many past technologies, is unforgiving.

An ERP can limp along with messy data because humans are there to compensate; AI only scales the mess. Bad inputs don't just create bad reports — they create automated answers that move faster than people can catch.

The 'pilot' paradox

The AI implementation bubble is a result of this confluence of factors: FOMO driving leadership behavior, AI's seeming "adoptability" and underlying data immaturity at an organizational scale.

The race to adopt AI has led boards to be distracted by activity metrics, like the number of AI pilot programs a company is running. The problem with these quantitative metrics is that they don't actually say much.

It's like a restaurant bragging about the number of ovens they have. Unless the restaurant can also report the number of chefs they have, the quality of their ingredients and the menu, knowing the number of ovens doesn't actually say much about their ability to cater a dinner.

More critical than simply running pilots is knowing which pilots are actually ready to scale. The unfortunate answer for most businesses is that most aren't.

The majority of AI pilots fail to progress to enterprise-scale deployment — not because AI as a technology isn't ready, but because the companies running them aren't ready for AI.

The AI bubble that's forming is fundamentally an expectations bubble, as companies fail to meet AI's full potential. When this bubble bursts, the winners and losers will not be determined by who ran the most pilots, but by who has the right culture.

As urgent as the race to adopt AI feels, without the proper data infrastructure, process flexibility and AI literacy, companies cannot even begin to compete.

The difference between those who see value in AI and those who do not comes down to the idea of readiness and culture. It's not a matter of finding some novel use for AI, but of data discipline.

Companies with clean, structured data and the discipline and flexibility to adopt AI into their processes are the ones maximizing their returns.

One effective, scalable pilot with measurable outcomes is more valuable than a dozen scrapped test cases. Even when models don't behave as expected, digging in and diagnosing what's not working can help companies implement critical changes organization-wide.

The AI bubble isn't about the technology living up to the hype. AI is ready. It's the companies that need work.

The winners won't be the companies with the most pilots. They'll be the ones who built the foundations that make AI worth implementing at all.

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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.

"Begin at the beginning," to quote the King of Hearts from Alice in Wonderland. That's how most people approach business ownership, and on its face, it seems like a smart strategy.

We all know the sobering statistics on entrepreneurship: According to the U.S. Bureau of Labor Statistics, about 21% of businesses fail in the first year, nearly 50% fail by year five, and about 65% fail within 10 years.

So to avoid becoming a statistic, most entrepreneurs focus primarily on the first five years (launching their business, securing funding, building operationally and scaling). But it would be a mistake not to also think about preparing for a potential exit.

What is your exit? Do you plan to sell the business, pass it to a family member, partner or employee or dissolve it?

While you might not readily know the answers to these questions, by following the five best practices below, you can both build your business and put yourself on stronger footing when the time comes to begin your next act.

1. Keep your financials clean and transparent

Often, business owners are good at what they do but need help on the financial side of running a company. If you want to eventually sell or transition your business, you will want to make sure everything is above board.

It is important to have a trusted executive — whether that's a CEO, CFO, outside accounting firm or even a fractional CFO — who can guide you in the day-to-day bookkeeping of your business, making sure you have proper cash flow and the right people in place.

Clean and transparent financials are critical to maximizing valuations. Unfortunately, I have worked with business owners who were not focused enough on the operations and finance side of their businesses and eventually found that employees were embezzling funds.

If you do not have a strong background in business accounting, make sure you bring on trusted, experienced people early who can set you up for success and keep it running smoothly as you grow.

2. Make sure the legal structure is aligned with your goals

When setting up a company, you can structure it as an LLC, C corp or S corp. There are different tax advantages to how you structure your business.

For example, if you are registered as an S corp through an LLC, you can give yourself a salary through the company and set up a solo 401(k) to maximize tax advantaged retirement savings.

You can also structure the company to support your retirement goals in additional ways.

For example, if you set your business up as an LLC, you can take out a private-placement life insurance policy through the business, which will allow you to protect and grow your assets tax-free.

3. Know when to scale your business

A business cannot rely solely on the person who founded it. Make sure you are creating a repeatable business model, which will add value to your eventual selling price.

For obvious reasons, very few buyers are interested in purchasing a business that will stop functioning if you no longer work there (unless they are buying your clients or buying you to stop you competing with them).

Therefore, to maximize valuation, you need to put in place the team and processes that allow the business to effectively function without you.

4. Protect yourself

Hire an attorney to help you on the planning side, but also with setting up trusts, taking out insurance, filing patents and all other important legal matters.

Where applicable, legally controlling and protecting the intellectual property of your business may also directly increase the value of the company.

5. Begin thinking of your long-term plans

Beyond your five-year growth plan, think about 10, 20 or 30 years down the road. Do you want to cash out completely or make a partial sale? Do you envision yourself working part-time in retirement or being fully retired?

Of course, your answers may change over time, and that is okay. Financial planning provides a road map and should never be set in stone.

By working with a financial adviser, you can create a strategy while also adjusting if your goals change over time.

Entrepreneurship is about being in control of your own life. When you are building a business, think about the full lifecycle — launch, scaling and eventual exit.

If you "begin at the beginning" but also think about where you want to land, you will be creating a road map to achieve not just your business goals but your vision for your life.

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

In these transactions, the rights and remedies available to shareholders in the minority vote vary widely across jurisdictions, shaped by each state's statutory framework and judicial interpretation.

In general, these protections may include the ability to dissent from the transaction, seek payment of the fair value of their shares and challenge the sale in cases involving fraud, self-dealing or other unfair conduct.

Many states provide some form of appraisal or dissenters' rights, though the scope, procedures and available remedies differ significantly.

For example, Florida law allows shareholders in the minority vote to demand the fair value of their shares to be paid to them based upon an appraisal determined as of the date before the objectionable action took effect. That value is often calculated using standard business valuation methods.

Shareholders in the minority vote should take the following initial steps to preserve their appraisal rights.

1. Review the relevant statutes

As the philosopher Francis Bacon famously said, "Knowledge is power." Understanding the law is the first step in protecting an investment. Even if a shareholder has no legal training, they should review the relevant statutes in their state that govern dissent and appraisal rights to understand both their rights and how to protect them should they choose to dissent from the action.

Familiarity with the law not only reveals where rights are being overlooked but also strengthens the shareholder's position when working with an attorney or engaging with the corporation.

2. Submit a timely written dissent

In most jurisdictions, a shareholder in the minority vote who wishes to dissent from a majority-approved sale of substantially all corporate assets must submit a timely written objection and follow the statutory procedures to preserve any right to seek the fair value of their shares.

For example, Florida statutes require the corporation to obtain the approval of its shareholders to sell all or substantially all of its property, and it must give notice to every shareholder of the meeting at which the disposition is to be submitted for approval, even those who are not entitled to vote. To preserve appraisal rights, a shareholder must not vote in favor of the transaction and must submit a timely written dissent in accordance with the applicable statutes.

Sometimes, statutes do not give a specific format for the dissent, but they consistently require that it be submitted in writing. If the statute or the corporate governing documents are silent, a good rule of thumb is to track the language of the relevant statute relating to notice of intent to demand payment or similar language.

The dissent should also strictly follow the procedures required and rights afforded by the corporation's governing documents, such as the bylaws or shareholder's agreement, which may have relevant information regarding dissent rights.

After the vote is effected wherein the proposed sale of substantially all the assets of the corporation has been approved and the shareholders in the minority vote have given their notice of dissent, the corporation must deliver a written appraisal notice to the dissenting shareholders.

If the corporation fails to do so, the dissenting shareholders should consult with a business lawyer experienced in working with closely held corporations to ascertain their rights. Legal counsel can help enforce the shareholders' rights.

3. Request key corporate records

If the corporation fails to deliver the appraisal notice or the shareholder disagrees with the corporation's assessment of the fair value of their shares, the shareholder may make a statutory demand for access to certain financial records from the corporation.

These documents assist a business valuator to perform an appraisal of the corporation, assess the company's true worth and, thereby, the fair value of the shareholder's ownership interest.

For example, Florida law recognizes a shareholder's right to inspect certain records. Under the state's statute, corporations must maintain basic records that shareholders are entitled to review.

In addition, the rule gives shareholders the right to inspect additional records, such as accounting documents, if the request is made in good faith, with specificity, and for a proper purpose related to their rights.

If the corporation refuses to comply, shareholders should consult with a business attorney who can enforce their statutory rights and, if necessary, seek court intervention to obtain the records.

Following these steps can strengthen a shareholder's ability to assert their dissent rights and to receive the fair value of their shares.

Lan Kennedy-Davis is a partner at RumbergerKirk with a diverse practice that spans corporate transactions, general and complex business litigation and family law.

Sandra Ferrin, special counsel at RumbergerKirk, provides legal representation to corporate clients and individuals in shareholder and partnership disputes, breach of contract, breach of fiduciary duty and business torts.

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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 love my job. As part of Vanguard's Financial Advisor Services team, I meet with financial advisers across the country to discuss their fast-growing technology stacks and determine how they can use AI to deliver better investment outcomes to their clients in a responsible way.

Our advice is to always focus on improving outcomes for investors, and that may mean using AI to help free up time that can be dedicated to supporting clients. Vanguard research shows the real benefit for clients lies in behavioral coaching.

But for advisers to use AI in ways that truly lead to better outcomes, they need to understand and trust it. In our 100-plus meetings with advisers in 2025 alone, these are their most common AI-related questions.

How can I get started using AI?

As you get started using AI, consider your north star. If you haven't developed a north star — what you want to accomplish with AI — you should. The north star should be established at the C-suite level, be mission-aligned and include a governance framework.

Vanguard's north star, for example, is to use AI to deliver better investor outcomes in a responsible way.

At the more tactical level, advisers who are newer to AI adoption are looking for quick, practical productivity wins. For advisers, the easiest wins involve using AI to support client interactions, summarize information and draft everyday content.

Every step of a client touchpoint can, and should, be enhanced with AI:

• Before a meeting, a GenAI application can create prep materials summarizing email activity and previous engagements logged in your customer relationship management (CRM) system
• During the meeting, AI can transcribe and take notes, allowing you to be more engaged
• After the meeting, AI can create customized follow-ups to keep the conversation going

As you continue using AI to help with client engagements, it will learn from your feedback and build its database of client communications, providing stronger drafts in the future.

Between client meetings, advisers spend much of their time reading and analyzing complex documentation — market perspectives, forecasts, economic news and policies, and so on.

At Vanguard, we leverage GenAI tools to summarize our market updates and perspectives to help advisers create personalized insights for clients based on their financial acumen, allowing advisers to more quickly get actionable information in their clients' hands.

Speed is of the essence when building trust with clients, and AI can help.

How can I build a data foundation that maximizes my AI tools?

You may have heard the phrase "garbage in, garbage out." Your AI tools are only as good as the data you have. In our conversations, many advisers have expressed that inconsistent data is a top constraint on AI value.

Beyond simple data collection from a CRM system or related tool, data classification and architecture are critical components to any enterprise AI strategy.

As advisers collect data for an AI tool to leverage, classification is critical. Advisers must ensure they have a system that designates access levels for all information, from simple emails to personal client data.

Most companies have established policies to designate data as being confidential, public and in-between. Those companies must ensure their AI tools — and their team members — understand and adhere to them.

For larger firms, investing in data engineers can be a great first step to create accountability in data classification and metadata development. By cleanly organizing data, AI tools can work more efficiently.

How do I find the right vendors?

When sourcing vendors, your north star and current tech stack and data infrastructure must be considered. Vendors that can stitch together existing tools such as CRM platforms, email platforms, content repositories and more can help avoid some of the "swivel chair" work that comes from platforms not being truly integrated.

Enterprise data privacy is a critical safeguard. It ensures your data remains within your organization's boundaries. Your vendor's technology must clearly distinguish what data it can and cannot use, preventing any information from being fed back into the LLM during employee interactions.

While most providers claim to offer this protection, we recommend validating it through a pilot period.

We also recommend that companies have multiple lines of "human-in-the-loop" governance reviews with quality control checks before any AI use case is made widely available. This can address potential hallucinations or biases and ensure any generated content is compliance-approved and aligned with your brand.

Even after these checkpoints, employees should still be trained on responsible use cases with any new tool.

What's next with AI?

When discussing AI adoption with advisers, I tend to define adoption in three stages, or the three As: assist, augment, and action. The industry is well into the "assist" stage, as advisers are already using algorithmic models to estimate Social Security income and health care costs in retirement.

In the near future, we are likely to see GenAI take these tools to the next level, supporting advisers with portfolio health checks, analysis and recommendations, moving us into the "augment" stage.

Further out, we will enter the "action" stage, where AI will move beyond helping to taking actions on the adviser's behalf. Advisory firms will leverage AI agents to execute tasks such as portfolio monitoring, rebalancing and routine client service, allowing advisers to focus fully on strategic planning and relationship building with their clients.

From quick productivity wins to building a robust data foundation and selecting the right partners, success with AI starts with clarity of purpose and responsible governance.

Advisers who embrace these principles will not only streamline operations but also free up time for what matters most: Guiding clients through complex financial decisions with confidence and care.

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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.

Picture this scenario: You're standing at the front of a steakhouse private room, halfway through your presentation. In the crowd, several attendees are nodding along and taking notes — proof that dinner seminars can be a great way to connect with potential clients. Still, you can't help but also notice a few guests focused more on the ribeye than the retirement strategies you're sharing.

For financial professionals, this experience is familiar. Dinner seminars have long been a reliable way to attract new clients.

But as marketing costs rise and consumer skepticism grows, some advisers find that seminars often attract people who are there for the free meal rather than for genuine financial advice.

Is there a better way? Can you stop chasing cold leads and start attracting high-quality prospects who actually share your values?

The answer may lie in a fundamental shift: Moving from transactional marketing to relationship-based referral marketing.

It's a strategy that could transform your entire practice, as demonstrated by Cramer & Rauchegger, a firm based in Maitland, Florida.

The high cost of cold marketing

Before finding a sustainable path, Scott Cramer and Tom Rauchegger, the founders of the firm, faced the same grind many advisers experience today. Their calendar was packed with three seminars every eight days. They were churning through venue rentals, direct-mail campaigns and catering bills.

While they were generating appointments, the cost of acquisition was steep — both financially and emotionally. They realized they were inviting the public and hoping to find qualified prospects. It was an expensive game of chance.

This is a critical reminder for any financial professional that prioritizing volume over value can be exhausting and inefficient. The key is to stop asking, "How do I get more bodies in the room?" and start asking, "How do I get the right bodies in the room?"

The psychology of referrals

The shift to a referral-only model isn't just about saving money; it's about leveraging trust.

When a prospect comes from a cold channel, you build trust from ground zero. With referrals, they borrow trust from the referrer.

During their transition, Cramer and Rauchegger discovered research suggesting that the conversion rate for qualified referrals hovers around 90%. This aligns with the famous business axiom: "All things being equal, people will do business with a friend; all things being unequal, people will still do business with a friend."

To make this shift work, you must change your mindset. Existing clients aren't just accounts; they're your advocates and most effective sales force.

Strategy No. 1: The honest conversation

One of the hardest hurdles for advisers is the fear of asking for help. However, transparency is a powerful tool. When Cramer and Rauchegger pivoted, they called a "town hall" meeting with their top clients — the 50 to 60 households they enjoyed working with the most.

They were honest about the changes, explaining that they wanted to focus entirely on serving their existing families better. They asked for help in building a community of like-minded people.

Key takeaway: Don't be afraid to tell your top clients that you want to clone them. Explain that you do your best work for people just like them and that you want to build your business around those shared values.

Strategy No. 2: Reframing the 'ask'

Many advisers struggle with referrals because it feels like begging: "Please give me a name so I can grow my business."

The approach needs to be reframed around value. The goal isn't to get a favor from the client; it is to provide such exceptional service that the client wants to share a name.

Cramer puts it this way: "We don't want you to refer us because you think you're helping us. We want to do such a good job for you that you're excited to refer us."

When you frame referrals as a benefit to the client's friends and family — ensuring their loved ones are taken care of by someone they trust — it removes the awkwardness. It transforms the referral from a transaction into an act of care.

Strategy No. 3: The 'gala' approach

If you're looking to complement or diversify your marketing beyond traditional dinner seminars, consider where your event budget can have the most impact.

You reinvest it in your clients. Instead of public seminars, consider hosting "Appreciation Galas" or social events where admission is simple: The client brings a guest.

• Educational events. In some months, host dinners with presentations on your services or market updates to emphasize your professional experience.
• Social events. In other months, host social gatherings that help build relationships.

This creates a natural, low-pressure environment. The guests (referrals) get to meet you, but more importantly, they get to meet your other happy clients. The social proof in the room does the selling for you.

The ROI of relationships

The results of this strategy speak for themselves. In the case of Cramer & Rauchegger, the firm trimmed its marketing budget, spending only 0.2% of its assets under management on client acquisition.

But the return on investment wasn't just financial; it was cultural, too.

Benefits of a referral-only model:

• Higher closing ratios. With a 90% conversion rate, you spend less time selling and more time advising.
• Natural filtering. Clients tend to hang out with people who share their socioeconomic status and values. This means prospects are likely to be as pleasant to work with as your best existing clients.
• Enjoyable work environment. As Rauchegger noted, events become celebrations rather than awkward networking sessions, allowing you to spend time with people you like.

Conclusion

Transitioning to a referral-based practice requires courage. But if you can execute this pivot — fostering true partnerships, communicating with transparency and reinvesting in your advocates — you won't just build a more profitable business; you will build a business that gives you the freedom to enjoy your success.

Investing involves risk, including the potential loss of principal. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier.

Our firm is not affiliated with the U.S. government or any governmental agency. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. 5154512 – 1/26

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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 entrepreneurs and family business owners, selling a company represents the culmination of decades of effort.

What often begins as a single idea grows into a highly concentrated asset that defines both net worth and personal identity. When the business is sold, that concentration turns into liquidity, creating both opportunities and risks.

The challenge is not simply negotiating a strong price. Taxes, timing, family dynamics and life after ownership all converge in one defining moment. Without thoughtful preparation, even a successful sale can leave owners feeling uncertain about what comes next.

With early planning, the transition can become a potential foundation for long-term security and a meaningful legacy.

The sale is both a financial event and a personal one

Most owners approach a sale focused on valuation, deal terms and market conditions. Those details matter, but they tell only part of the story. Selling a business also brings emotional weight.

Many founders wrestle with identity loss, fear of regret if they exit too early or worry about how sudden wealth will affect their children.

Financial complexity compounds these concerns. An illiquid, tax-efficient business must be converted into a personal balance sheet designed to support spending, investing and family goals for decades.

Decisions made under pressure can lead to unnecessary taxes, misaligned investments or strained relationships.

Recognizing that a sale is both a financial and personal transition reframes the process. The focus shifts from simply closing a deal to shaping what comes next.

Build the plan before the buyer shows up

The most effective planning happens well before negotiations begin. Ideally, owners start preparing two to five years ahead of a potential sale. This window provides flexibility, which is often the greatest advantage an owner has.

Early preparation typically includes:

• Clarifying personal financial readiness, including post-sale lifestyle needs, long-term spending and financial independence targets
• Modeling multiple valuation scenarios to understand how different outcomes affect future plans
• Reducing reliance on a single asset, so personal finances are not entirely dependent on deal timing or price
• Coordinating advisers early, including attorneys, accountants, bankers, valuation specialists and investment professionals

When these elements are aligned in advance, owners are more prepared to enter negotiations with confidence and clarity. Once a letter of intent (LOI) is signed, options narrow quickly. Ownership transfers become difficult, valuations become fixed and decisions are often rushed.

Early planning helps to position the sale to serve broader goals, rather than dictating them.

Reduce taxes while options still exist

Taxes are often the largest expense associated with selling a business, yet they're also among the most manageable with proper timing.

Advanced planning allows owners to evaluate and implement strategies that might no longer be available once a deal is underway.

Common areas of focus include:

• Entity restructuring or installment planning to improve after-tax outcomes
• Capital gains exposure and state tax considerations
• Verification and optimization of qualified small business stock eligibility
• Gifting shares to irrevocable trusts before a sale to remove future appreciation from the taxable estate
• Charitable strategies such as donor-advised funds or charitable remainder trusts

Many of these strategies must be implemented before an LOI is signed. Waiting too long might eliminate potential tax benefits.

Frequent missteps include: assuming qualified small business stock (QSBS) eligibility without proper analysis; overlooking depreciation recapture or employment taxes; and committing too much capital to charitable vehicles without preserving personal liquidity.

While taxes can't be avoided entirely, early planning can significantly reduce avoidable costs and create greater certainty around net proceeds.

From concentrated business wealth to long-term security

Selling a business often marks the first time an owner transitions from concentrated equity into liquid wealth.

That shift can be disorienting, particularly for founders who are deeply familiar with their industry but less experienced managing diversified portfolios.

A thoughtful transition plan focuses on aligning new liquidity with long-term goals while managing risk. Rather than investing proceeds all at once, many owners benefit from a phased approach that balances market exposure, taxes and cash-flow needs during the initial post-sale period.

The first year after liquidity is especially vulnerable. Common mistakes include:

• Investing too aggressively or remaining overly conservative
• Committing to informal or relationship-driven investment opportunities
• Neglecting cash-flow planning
• Failing to update estate documents and insurance coverage

A disciplined framework grounded in goals and realistic risk capacity helps new wealth feel stable and purposeful, rather than overwhelming.

Protect the family and preserve the legacy

For many first-generation wealth creators, the most important question is not how much wealth is created, but what that wealth will mean for their families. Concerns about entitlement, conflict and the erosion of core values are common.

Effective legacy planning emphasizes structure as much as assets. Multigenerational trusts, asset protection strategies, insurance planning and clearly defined distribution guidelines can help protect heirs while encouraging independence and responsibility.

Governance frameworks and open family conversations further clarify expectations around control, privacy and long-term purpose.

The difference between early and late planning is often significant. Owners who prepare well in advance can reduce taxes, align family members and transition into the next chapter with clarity.

Those who wait until a deal is underway frequently face higher taxes and avoidable family strain.

The most valuable advice for any owner considering a sale is straightforward: Start sooner than you think is needed. Aligning tax strategy, estate planning, family priorities and investment decisions before a buyer enters the picture creates flexibility and confidence.

More important, it increases the likelihood that the wealth created will support both financial security and a lasting legacy for generations to come.

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• Opportunities and Challenges When You Inherit an IRA

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.