DEV Community: Doug Greenberg

How to Coordinate Advisors When Selling Your Business

Doug Greenberg — Wed, 29 Jul 2026 17:18:39 +0000

Hiring a banker, a CPA, and an estate attorney does not give you a coordinated exit team. It gives you three separate relationships that only look coordinated if you force them to be. If you are wondering how to*coordinate advisors when selling a business*, the honest answer is that coordination is a set of habits, not a hire. In decades of watching business sales unfold, I have seen good individual advisors produce a bad collective result, simply because nobody made them talk to each other before the decisions that mattered most were already locked in.
If you own a business and you already have a banker, a CPA, and an attorney lined up for your sale, this post is for you.

Key Takeaways

Three excellent advisors do not automatically add up to one coordinated team.
Industry surveys, including work published by the Exit Planning Institute, have repeatedly found that a majority of owners report some degree of regret after selling, and that most did not have a written transition plan in place. Figures vary by survey and year.
An advisor who nominates themselves as 'the quarterback' is not automatically a red flag, but it deserves a second look.
Real coordination has three concrete features: one shared source of truth, a standing call, and a named owner for each decision.
The wealth advisor is usually the only person still in the room a year after closing. That matters more than it sounds like it should.

The Frame: Three Good Advisors, Zero Coordination

Here is what actually happens on most deals. An owner hires a banker to run the sale process. Somewhere along the way, a CPA gets pulled in to handle tax questions. An estate attorney shows up, often late, to talk about what happens to the proceeds. Each of these people is good at their job. None of them were hired as a team.

Why This Is a Structural Problem, Not a Talent Problem

This is not a competence problem. It is a structure problem. Each advisor has a different fee model, a different timeline, and a different definition of success. The banker wants to close the deal. The CPA wants to minimize transaction-year tax. The attorney wants clean legal language. None of those goals is wrong, but none of them, alone, protects the owner's long-term financial picture.

What Owner-Readiness Research Says About Regret

The Exit Planning Institute has published survey research in this area for several years, and the directional finding has been consistent: a majority of owners report some degree of regret after selling, and most did not have a written transition plan in place. I am not going to repeat a precise percentage here, because the exact figure varies by survey year and methodology, and I would rather you read the source study yourself than take my summary as the final word. A documented plan is not paperwork for its own sake. It is the mechanism that forces advisors to see the whole picture instead of just their slice of it.

The Self-Appointed Quarterback Problem

Search this topic and you will find the same advice everywhere: hire a wealth advisor to quarterback your deal team. Firms like BNY Wealth and others make this pitch often, and even large institutional practices likeDeloitte Private position their exit advisory work around integrated delivery across tax, legal, and deal-execution disciplinesfor the same reason. It is not wrong that someone needs to hold the pieces together. But an advisor who nominates themselves for that role, without being asked, deserves a second look.

Why Owners Are Right to Be Skeptical

I do not pitch myself as the quarterback of anyone's deal team, and I would tell you to be cautious of anyone who does it automatically. Self-nomination often protects the advisor's own relationship, not the owner's outcome. Sophisticated owners have learned to ask a different question.

What to Ask Instead of Who Is in Charge

Instead of asking who is in charge, ask this: who is accountable for making sure the CPA, the attorney, and the banker are actually looking at the same numbers, on the same day, before a decision gets made. That question exposes whether you have a team or three separate vendors.

What Real Coordination Actually Looks Like

Coordination is not a feeling. It is a small number of concrete habits. Here is what I look for, and what I recommend any owner demand from their existing advisors, regardless of who ends up running point. This is not a new observation in financial advisory practice management generally:research on multi-advisor teamsfinds that ad hoc coordination and duplicated meetings, not a lack of individual skill, is what erodes a team's effectiveness once more than a couple of people are involved. That research focuses on internal advisory team structures rather than cross-firm exit deal teams specifically, but the underlying dynamic, coordination gaps driven by structure rather than skill, tracks with what I see across banker-CPA-attorney deal teams as well.

One Shared Source of Truth on Deal Terms

Everyone on the team, the banker, the CPA, the attorney, and the wealth advisor, should be looking at the same document for deal terms. Not three separate summaries. One document. This matters most for details likeworking capital adjustments that get missed without a shared source of truth. Those adjustments are exactly the kind of deal-term detail that quietly costs owners money when nobody is watching the whole board.

A Standing Call, Not an As-Needed One

As-needed calls do not happen when they are needed most. A standing 30-minute call, on the calendar every week or two, forces the conversation to happen even when nobody thinks they have news. This does add coordination overhead, and in some cases additional billable time from your advisors, so weigh that against the cost of the gaps it prevents. The best coordination I have seen happens on calls nobody wanted to schedule but everyone showed up to anyway.

Naming Who Owns What, Before the LOI Stage

By the time you sign a letter of intent,the highest-leverage structuring decisions are already locked in. Entity structure, holding-company layers, and installment-sale mechanics are often far more effective to address before signing an LOI than after, though the right approach depends on your specific facts and should be worked through with your own CPA and attorney. If nobody has explicitly named who owns which decision before that point, your options are already narrowing.

The Analogy

Think of it like building a house in Texas with a foundation crew, a framing crew, and an electrician, all hired separately, none of whom have seen each other's blueprints. Each crew does solid work. But if the electrician does not know where the foundation crew ran the plumbing, you get a wall that has to be torn open later. An exit team without coordination works the same way. Each advisor does good work in isolation. The tear-open moment just happens eighteen months after closing instead of during construction.

The Fix

Ask each advisor directly who they expect to coordinate the group, and see if the answers match.
Set a standing call before the LOI stage, not after.
Build one shared deal-terms document everyone can see and edit.
Name, in writing, who owns post-close items like earnout calculations and seller-note compliance.
Bring your wealth advisor into early conversations, not just the closing dinner.
Ask what happens to the relationship with each advisor after the wire clears.

The Point

Coordination is not about finding the right person to be in charge. It is about building habits that force information to move between advisors before decisions get made instead of after. Hypothetical example: a business owner with $8M in expected proceeds might have a CPA who structures the deal to minimize transaction-year tax, without realizing that structure creates a worse funding outcome for the trust the owner intends to set up eighteen months later. Nobody flagged the interaction because nobody was looking at both pieces at once.*This example is hypothetical and for illustrative purposes only. It does not represent an actual client, transaction, or outcome. Actual results depend on individual facts and circumstances and will differ.*That is the coordination gap, and it is fixable with the right habits, not a new hire.

The Gap Nobody Talks About: After the Wire Clears

The CPA is usually done when the return is filed. The M&A attorney is usually done when the purchase agreement is signed. The wealth advisor is often the only person from the original team still in the room a year later, managing the proceeds and watching decisions made during diligence turn into real financial-planning consequences. That is not a reason to hand anyone the quarterback title upfront. It is a reason to think, early, about who is still accountable to you after everyone else has moved on. For more on what actually goes wrong in that window, seewhat actually goes wrong in the first 100 days after the wire clears.

When to Start Building This, and With Whom

The earlier you build these habits, the more structuring options stay open. Waiting until you have a signed LOI to introduce your wealth advisor to your CPA means the highest-leverage decisions are already behind you. Start the shared document and the standing call the moment you have more than one advisor engaged, even if a sale is still a year or two away.

Frequently Asked Questions

Who should coordinate my exit planning team?There is no single correct answer, and be cautious of any advisor who assumes the role without being asked. What matters more than the title is whether the group has a shared deal-terms document, a standing call, and named ownership for post-close items.Do I need a wealth advisor before I have a buyer?In my experience, bringing a wealth advisor in early, well before a signed letter of intent, helps surface structuring decisions that are much harder to unwind once the deal terms are locked in.What happens to my advisory team after the sale closes?Typically the CPA's engagement ends once the transaction-year return is filed and the attorney's role ends once the purchase agreement is signed. The wealth advisor is usually the team member still active, managing the proceeds and monitoring earnout or seller-note compliance.How do I know if my advisors are actually coordinating or just billing separately?Ask if they are working from one shared document on deal terms, meeting on a standing schedule rather than only as needed, and can each name who owns specific post-close responsibilities. If the answers are vague, they are likely working in silos.Is it a red flag if an advisor wants to run the whole process?Not automatically, but it is worth a closer look. An advisor volunteering to run point can be helpful, or it can be protecting their own fee relationship rather than solving the coordination problem. Ask how they propose to keep the other advisors informed, specifically.What's the difference between a deal team and a wealth planning team?The deal team, banker, attorney, and often the CPA, focuses on getting the transaction closed on favorable terms. The wealth planning team focuses on what happens to the proceeds for decades afterward, including tax-efficient diversification, estate structuring, and charitable strategy. Ideally these teams overlap and communicate well before closing.

Work with Pinnacle Wealth Advisory

If you are assembling or already working with an exit team and want a second look at whether real coordination is happening, or you want a wealth planning perspective brought into the conversation earlier rather than later, it might be worth a conversation. Learn more aboutexit planningat Pinnacle Wealth Advisory.
Estate and tax mechanics referenced here are general in nature. Always consult your own CPA and attorney for guidance specific to your entity structure and jurisdiction, since PNWA is an investment adviser, not a law or accounting firm.
Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes. Doug Greenberg is an investment adviser representative of SB Advisory LLC, a registered investment adviser. This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC.

How to Handle an Inheritance Windfall Without Making a Costly Mistake

Doug Greenberg — Tue, 28 Jul 2026 23:44:31 +0000

If you are about to inherit a million dollars, the first thing to know is this:do nothing fast.The biggest mistakes I have seen business owners make with an inheritance windfall happen in the first 90 days, not the first year. In 33 years advising business owners in Austin, I have watched sudden wealth create more stress than it resolves, mostly because people move before they understand what they actually have.
This post is for business owners, executives, and pre-retirees who are expecting or have just received a large inheritance. If that is you, slow down. The decisions you make in the next few months will shape your tax bill and your financial security for years.

Key Takeaways

Inherited assets often get a*step-up in cost basis*, which can wipe out capital gains taxes you would have owed if the assets were sold during the original owner's lifetime.
Money from an estate is rarely instant.Probate and trust administrationcan delay access to funds for months or longer.
A windfall concentrated in one asset, like company stock or real estate, adds*concentration risk*on top of what you may already carry as a business owner.
Inherited IRAs follow different rules depending on whether you are a spouse or a non-spouse beneficiary.
The right first move is usually a*holding pattern*, not a purchase, a payoff, or a portfolio overhaul.

The Frame

An inheritance windfall is not the same as earned income or investment growth. It arrives suddenly, often during a period of grief, and it frequently comes with assets you did not choose and may not fully understand. The tax rules that apply to inherited money are also different from the rules that apply to money you build yourself over a career.
Understanding those differences before you act is the whole game. Rushing to pay off debt, buy real estate, or reinvest in your own business before you know the tax picture can cost you real money.

The List: What You Need to Know

1. Step-Up in Basis Can Change Everything

When you inherit assets like stock, real estate, or a business interest, those assets typically receive what is called a*step-up in cost basis*(perIRS Publication 559). In plain terms, the asset's value gets reset to its fair market value on the date of death for tax purposes (IRC § 1014). This can eliminate embedded capital gains that built up over decades.
Hypothetical example: an inheritor receives a piece of real estate the family purchased for a low price many years ago. Without a step-up, selling it could trigger a large capital gains tax bill. With the step-up, the tax basis resets, and much of that gain may disappear for tax purposes. This is one reason planning*before*death, throughestate planning strategies, is often more flexible than reacting after the fact.

2. The Money May Not Be Available Right Away

Probate, trust administration, and creditor claims can create a real gap between the date of death and the date you actually receive funds. This gap can stretch for months, sometimes longer, depending on the complexity of the estate.
Do not make big personal or business decisions, like committing to a new investment or paying off a large loan, based on money that has not landed in your account yet. Plan your interim cash flow as if the inheritance does not exist until it is actually in hand.

3. Concentration Risk Compounds Fast

If you already own a business, most of your net worth is likely tied up in that one asset. An inheritance windfall concentrated in a single stock, a family business stake, or a piece of real estate adds a second layer of concentration risk on top of what you already carry.
Hypothetical example: a business owner with $6M in company equity inherits a $1M concentrated stock position from a parent's estate. Now nearly all of that owner's wealth sits in just two illiquid or concentrated buckets. A thoughtfulwealth managementapproach usually means diversifying over time, not all at once, to manage both tax friction and emotional attachment to inherited assets.

4. Inherited Retirement Accounts Have Their Own Rulebook

Inherited IRAs and other qualified retirement accounts do not follow the same distribution rules as other inherited assets. A surviving spouse generally has more flexibility, including the option to treat the account as their own. A non-spouse beneficiary faces a different, often less flexible, set of distribution requirements.
Confusing these two paths is one of the most common and costly mistakes I see. Before you touch an inherited retirement account, confirm which category you fall into.

5. Illiquid Assets Force a Real Choice

A million-dollar inheritance is rarely sitting in cash. More often it is a business stake, real estate, or restricted stock. You generally face three paths: hold for long-term appreciation, sell in full to create liquidity, or sell in structured, partial pieces over time.
Each path carries different tax and control consequences. There is no single right answer here, it depends on your existing balance sheet, your income needs, and how much risk you are already carrying elsewhere.

The Analogy

Think of an inheritance windfall like inheriting a truck full of cattle instead of cash. The truck shows up, but you cannot spend cattle at the grocery store. You have to figure out what to sell, what to keep, and how fast you need the money, all before you can actually use it. Moving too fast means selling at the wrong time or in the wrong way. Moving too slow means missed opportunities. The goal is a deliberate plan, not a fire sale and not paralysis either.

The Fix

Wait until funds are actually distributed before making major financial commitments.
Get a clear accounting of the tax basis on every inherited asset before selling anything.
Identify whether any inherited retirement accounts are spousal or non-spousal before taking distributions.
Build a diversification plan for concentrated positions instead of an all-at-once sale.
Coordinate the inheritance with your existingexit planningor business succession plans so the two do not work against each other.
Loop in a tax professional before filing anything related to inherited assets.

The Point

An inheritance windfall is not free money, it is a financial event with real tax mechanics, timing constraints, and risk implications. The business owners I have seen handle this well are the ones who paused, understood the basis rules, confirmed the timeline, and built a diversification plan before making any big moves. The ones who struggled acted fast and asked questions later.

Frequently Asked Questions

How long does it typically take to receive an inheritance?Probate and trust administration can create delays ranging from a few months to well over a year, depending on the complexity of the estate and whether creditor claims are involved. It is wise to plan your cash flow as though the inheritance is not available until it is actually distributed.Do I have to pay capital gains tax on inherited stock?Inherited stock typically receives a step-up in cost basis (seeIRS Publication 17) to its value on the date of death, which can significantly reduce or eliminate capital gains tax if you sell soon after receiving it. The specific tax impact depends on your individual situation, so confirming the basis with a tax professional is an important first step.What is the difference between a spousal and non-spousal inherited IRA?A surviving spouse generally has more flexibility, including the option to treat the inherited IRA as their own retirement account. A non-spouse beneficiary is subject to a different, often more rigid, set of distribution rules, so confirming which category applies to you is essential before taking any distributions.Should I pay off my business debt with an inheritance?It depends on the interest rate on the debt, your liquidity needs, and the tax character of the inherited assets. This is a decision that should be made with a full financial picture in view, not as an immediate reaction to receiving funds.How do I avoid overconcentration after inheriting company stock or real estate?Most advisors recommend a phased diversification strategy rather than an immediate full sale, which can help manage both tax consequences and the emotional attachment often tied to inherited assets. The right pace depends on your overall net worth, income needs, and existing concentration in your own business.

Work with Pinnacle Wealth Advisory

If you are navigating an inheritance windfall alongside your own business ownership, the interaction between the two can get complicated fast. If this would be useful for your situation, here's where to start:explore exit and wealth planning at Pinnacle Wealth Advisory.
Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes. Doug Greenberg is an investment adviser representative of SB Advisory LLC, a registered investment adviser.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC.

Should You Tell Your Kids How Much They Will Inherit?

Doug Greenberg — Mon, 27 Jul 2026 03:35:02 +0000

Should you tell your kids how much they will inherit?In most families, yes, though not necessarily down to the exact number. New data from Key Wealth's 2026 Inheritance Pulse Poll found that 64% of expected inheritors are already reshaping their financial decisions around money nobody has confirmed to them, and only 34% formed those expectations through an actual family conversation (Key Wealth 2026 Inheritance Pulse Poll). Staying quiet does not stop your children from planning around your estate. It just guarantees they plan around a number they made up.
In*33 years*advising business owners in Austin, I have watched families spend a decade perfecting trust documents and roughly zero hours on the conversation that determines whether those documents actually land well. If you own a business, hold concentrated stock, or are sitting on a sizable estate and wondering how much to tell your kids, this post is for you.

Key Takeaways

64% of heirsare already reshaping their financial choices around an unconfirmed inheritance, according to the Key Wealth 2026 poll.
Silence is not neutral. It is a decision, and it has a cost.
You do not have to disclose an exact dollar figure to give your kids something real to plan around.
Both parents and children often stay quiet for reasons that feel like good manners but are actually just avoidance.
A facilitated family meeting, run by a neutral third party, changes what actually gets said in the room.

The Frame: What Your Children Are Already Doing With a Number You Never Gave Them

Here is the uncomfortable part. Your children are not waiting for your permission to think about inheritance. They are already making decisions based on it, whether you have said a word or not.

The 2026 Data on Inheritances Nobody Confirmed

The Key Wealth 2026 Inheritance Pulse Poll found that*36% of expected heirshave already saved or invested at least $100,000 less than they otherwise would have, and40%*are saving less for their own retirement because they are counting on money that has never actually been confirmed to them. Coverage of the same poll byInvestmentNewsnotes this pattern shows up across income levels, not just among the very wealthy.

Why Saving Less and Taking More Risk Is the Expensive Part

36% of heirsare also taking on more investment risk than they normally would, banking on a future windfall to cushion the downside, per the same Key Wealth poll. If that inheritance shrinks, arrives later than expected, or gets split differently than assumed, the shortfall shows up in someone's retirement account, not yours. That is the real cost of silence. It does not stay contained to you.

The List: Why Both Sides Stay Quiet, and Why It Is Not Politeness

I have sat across the table from enough families to see the pattern. Both generations think they are being considerate. Neither one is.

The Parent's Reason: Discretion, Control, and Not Wanting to Demotivate

Parents often worry that disclosing a number will sap their children's ambition. That instinct is not unreasonable. But withholding information entirely trades one risk (reduced motivation) for another (shock, resentment, or poor decisions when the transition finally happens). The research on*motivation and entitlement risk*cuts both ways: early disclosure can shape a child's work ethic and financial discipline, for better or worse, depending on how it is framed.

The Child's Reason: Not Wanting to Look Like They Are Counting on It

Here is the part most advice columns miss. According to the Key Wealth poll,50% of adult childrenwho have not discussed inheritance with their parents say they avoid the topic because they do not want to appear to be counting on the money. So the parent stays quiet out of prudence. The child stays quiet to avoid looking greedy. Both mistake silence for good manners. Meanwhile,25% of heirssay they would need to work considerably longer if the inheritance does not materialize the way they assumed.

The Analogy: Silence Is Not a Neutral Setting

Think of it like handing your kids a truck without telling them how much weight it can carry. They will load it up based on guesswork. Some will underload it out of fear. Others will overload it and find out the hard way, usually at the worst possible moment. A short conversation about capacity does not ruin the truck. It just prevents a breakdown on the highway.

The Fix: What to Share, and What You Can Keep Private

You do not need to hand your children a spreadsheet. You need to give them enough structure to plan responsibly.

Share the structure:Will assets pass through a trust, directly, or through the sale of a business?
Share the intent:Is the goal an equal split, or will one child inherit an operating business while others receive liquid assets?
Share the timing:Are distributions tied to your lifetime, a triggering event, or a set age?
Share the conditions:Are there strings attached, like continued employment in the family business?
Keep the exact balance private if you want to.The precise dollar figure is often the least useful number in the room. Structure and intent matter more than a total.
Revisit the conversation periodically.Estate values change. So should the conversation.

How I Facilitate the Conversation Across Generations

This is the part that cannot be handled by an estate attorney alone, and it is not really a banking question either. It sits at the intersection of the business and the family, which is exactly where I spend most of my time.

Meeting Each Generation Separately First

Before I ever put a family in the same room, I meet with each generation on its own. Nobody should discover their position in the family for the first time in front of everyone else. Separate conversations surface concerns that would otherwise stay buried.

Setting the Scope Before Anyone Sits Down

I work with parents in advance to agree on what gets shared, structure, intent, timing, and conditions, and what stays private, like exact account balances, if that is the boundary they want. Having this defined ahead of time keeps the actual meeting from turning into an improvised negotiation.

Why a Neutral Third Party Changes What Gets Said

Families will say things to an outside advisor that they will not say across their own kitchen table. When I run the meeting, the parent is not simultaneously the messenger and the subject of the conversation. Children can ask a direct question without it sounding like a demand. That shift alone changes the entire tone of the room.

Turning a Disclosure Into an Ongoing Plan

A single meeting is not the finish line. In my experience, the more useful outcome is a plan with next steps: who holds what role if a parent needs care, where documents are kept, and when the family will revisit the conversation. That structure is designed to reduce confusion later, not to guarantee a conflict-free outcome; no conversation can promise that.
Hypothetical example: consider a business owner who tells his children they will be fine financially and leaves it there. One of his children, hearing only that vague reassurance, might quietly under-save for retirement for years, assuming a safety net that was never clearly defined. That gap does not surface until the estate is finally settled, often at the worst possible time for everyone involved.

When the Answer Is Genuinely Not Yet

Sometimes the honest answer is that the estate plan is not finished, the business valuation is uncertain, or a family relationship needs work before a financial conversation can be productive. That is a legitimate reason to wait. It is different from avoiding the topic indefinitely. Set a rough timeline for when you will revisit it, even if that timeline is loose.
If you are still building the plan itself, it helps to understand thatpreparing heirs is a different job than preparing documents. And if you are an Austin-based owner weighing a sale alongside this conversation, it is worth understandinghow Texas residency changes the estate picture before a sale, since that timing often overlaps with when families decide to have this talk. If you have already sold and are wondering how the conversation changes once the money has actually arrived, that is a related question covered inwhat happens after the money actually lands.

Frequently Asked Questions

Should I tell my children the exact amount they will inherit?Not necessarily. Sharing the structure, intent, timing, and any conditions attached to an inheritance is often more useful to your children than the precise dollar figure. Many families keep the exact balance private while still giving heirs enough information to plan responsibly.At what age should I talk to my kids about their inheritance?There is no single right age. Age-appropriate, values-centered conversations tied to family goals tend to produce better outcomes than a single lump-sum disclosure later in life. Many families begin general conversations in early adulthood and add detail over time.What if telling them makes them less motivated to work?This is a legitimate concern, and it is one reason structure matters more than a number. Framing the conversation around family values and expectations, rather than just a dollar amount, is designed to reduce that risk, though no approach can guarantee a particular outcome.How do I bring it up if my parents will not discuss their estate plan?Approach it as a planning question rather than a confrontation. Asking whether a family meeting with a neutral advisor would help everyone plan is often easier to raise than asking directly about dollar amounts.What is a family wealth meeting, and who runs it?A family wealth meeting is a facilitated conversation, often led by a financial advisor or estate professional, where the family discusses the structure and intent of an estate plan. A neutral third party is often used because families will say things to an outside advisor that they will not say to each other directly.Should all my children hear the same information at the same time?Not always. Meeting with each family member individually before a group conversation allows concerns to surface privately, so nobody learns their position in the family for the first time in front of everyone else.What if the plan is unequal between children?Unequal distributions, such as one child inheriting an operating business while others receive liquid assets, are common. Transparency about the reasoning behind an unequal plan tends to reduce suspicion and conflict compared to families where this is discovered only after a parent has passed.What happens if I say nothing at all?According to the Key Wealth 2026 Inheritance Pulse Poll, most heirs form financial expectations with or without a conversation. Saying nothing does not prevent your children from planning around your estate. It only means they are planning around a number nobody confirmed.

Work with Pinnacle Wealth Advisory

If you are weighing how much to tell your children about an inheritance, or you want a neutral facilitator in the room when that conversation happens, it might be worth a conversation.Here's where to start.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC. Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes. Doug Greenberg is an investment adviser representative of SB Advisory LLC, a registered investment adviser. Estate and tax mechanics discussed here are general in nature; consult your attorney and CPA for guidance specific to your estate plan.

Why an AI Portfolio Still Can't Replace a Financial Plan

Doug Greenberg — Tue, 30 Jun 2026 01:07:52 +0000

Here is the short answer, because you are busy. An AI tool can build and rebalance a portfolio just fine. What it cannot do is the part that actually protects your money: stop you from selling at the bottom, deploying a windfall all at once, or anchoring on the price you sold your business for.
After a sale, the largest threat to your wealth is not your asset allocation. It is your own behavior, and an algorithm has no stake in your outcome.
I have spent 33 years advising business owners, and I am watching the AI wave arrive in real time. A 2026 Fidelity survey found that more than two-thirds of wealth firms already use generative AI, and the AI investing tools marketed to do-it-yourself owners are multiplying (Fidelity, 2026 wealth management trends). They are useful. They are also sold as a replacement for advice, and for a newly liquid owner that confusion gets expensive fast.

Key takeaways

AI portfolio management handles the mechanical work well: allocation, rebalancing, tax-loss harvesting, low cost.
It cannot manage your behavior, which is where most wealth is actually lost.
The investor behavior gap, the cost of buying high and selling low, runs about a percentage point a year on average.
The first downturn after a business sale is the single most dangerous moment for that behavior.
A written financial plan governs what an algorithm cannot. The software runs the portfolio underneath the plan.

What does an AI portfolio tool actually do well?

Give the software its due. AI investing tools build a diversified allocation, rebalance it when it drifts, harvest tax losses, and keep costs low. That used to justify a management fee all by itself.
But look at what that list has in common. Every item is a decision about what you own. None of it is a decision about what you do, or refuse to do, when the market turns against you. That second category is where real money is made and lost, and it is exactly where the algorithm goes quiet.

The part AI can't do: managing behavior, not allocation

What is the investor behavior gap?

The investor behavior gap is the difference between what a fund returns and what the average investor in it actually earns. The two are not the same, because people buy after prices rise and sell after they fall.
Morningstar measures this every year in itsMind the Gap study. Over the past decade it found investors trailed the very funds they owned by roughly a percentage point a year, almost entirely from mistimed buying and selling. Compounded on an eight-figure portfolio, that is not a rounding error. It is a house.
Vanguard looked at the same problem from the other side. Its analysis of the value of advice estimates that good guidance can add a meaningful amount to net annual return, and the largest single component is not clever investment selection. It is behavioral coaching, the unglamorous work of keeping someone invested through a frightening market (Vanguard on what AI can and cannot replace). These are industry estimates, not a promise, and individual results vary.

Why a business sale is the most dangerous moment for it

For most owners, the first big downturn after a sale is the most dangerous financial moment of their lives. For decades your wealth was your company, an illiquid thing you could not check on a screen at 9:31 in the morning. The day the wire clears, that changes. Your net worth suddenly has a live price, and a routine 15 percent dip feels like losing a fortune you just earned.
A few years ago I sat down with a business owner who had just sold a manufacturing company. He wanted to put the whole balance in an index fund and, in his words, let the software run it. A few months later the market fell about 12 percent and he called me ready to sell everything and wait in cash.
We walked back through his written plan, his income did not depend on selling, and he stayed invested. The tool would have rebalanced perfectly the whole way down and never once picked up the phone. That example is illustrative and is not a specific client endorsement.

How does an AI tool fail a newly liquid owner?

Three ways, and I have watched all three.

Anchoring on the sale price.The number on the wire becomes a mental floor, so owners sit in cash waiting for the market to hand that exact figure back. An algorithm only manages the money you actually give it; it will not notice you are frozen.
Lump-sum panic, or paralysis.Some invest the whole balance in an afternoon and cannot stomach the first drawdown. Others never invest at all. The right pace depends on your temperament and your plan, not an app default. This is the timing trap behindwhy moving to cash before the Fed meets usually backfires.
Selling into the first downturn.The expensive one. The allocation was textbook and none of it mattered, because the owner sold at the worst time. An automated "stay the course" message is not a person who knows your plan and has talked you off this ledge before.

Portfolio versus plan: what the difference is worth

A portfolio is what you own. A plan is what you do, and do not do, when markets move. It sets how proceeds get deployed and over what period, how much cash buys you the freedom to ignore a bad year, and where income comes from so you are never a forced seller.
That discipline is what keeps owners ahead ofsequence-of-returns risk in early retirement, and it driveshow to invest like a family office when you have $10M to $25M. Once the plan exists, software is a fine way to run the portfolio underneath it.

Where AI does belong in the process

An honest answer has to say it: AI earns its place. Use it to keep costs low, rebalance without drama, model scenarios quickly, and handle the mechanical work that does not need a human.
A good advisor in 2026 uses these tools too (CNBC on AI's limits in financial advice). The mistake is not using AI. It is believing the tool is the plan, when it is only the engine that runs underneath one.

Frequently Asked Questions

Can AI replace a financial advisor?For building and rebalancing a portfolio, AI is capable. For the work that protects wealth, keeping you from selling at the bottom, deploying a windfall poorly, or anchoring on your sale price, it cannot replace a human who has a stake in your outcome.Is a robo-advisor good enough after selling a business?It can run the portfolio, but it does not write or enforce a plan for how a large, newly liquid balance gets deployed and defended. That planning layer is where most post-sale mistakes are avoided.What is the investor behavior gap?It is the gap between what a fund returns and what the average investor in it earns, caused by buying high and selling low. Morningstar's Mind the Gap study has measured it at roughly a percentage point a year over the past decade.How should I invest the proceeds after selling my business?Start with a written plan that sets the deployment schedule, the cash reserve, the income source, and the rules for a downturn before emotion arrives. Then let a low-cost portfolio do the mechanical work underneath it.Should I deploy proceeds all at once or over time?It depends on your temperament and your plan, not an app's default. The goal is a schedule you can stick to through the first bad market, which is exactly the decision an algorithm cannot make for you.

Work with Pinnacle Wealth Advisory

If you are within five years of a sale, or you have already sold and the proceeds are sitting in cash while you decide, it is worth a conversation before the first downturn makes the decision for you.Learn more about our approach to planning around a liquidity event.
Disclosure: Doug Greenberg is an investment adviser representative of SB Advisory, LLC, a registered investment adviser. He provides services and conducts business as Pinnacle Wealth Advisory. This article is for educational purposes only and does not constitute investment, tax, or legal advice. Past performance does not guarantee future results, and no outcome is guaranteed. Consult a qualified advisor about your specific situation.

How to Prepare Heirs Before the Wealth Transfer

Doug Greenberg — Mon, 22 Jun 2026 01:10:19 +0000

The Inheritance That Isn't Money

It's Father's Day, so I have been thinking about what actually gets handed down. After 33 years advising families, the wealth that lasts is almost never the money.
The short version:most family wealth is lost within three generations, and the cause is almost never taxes or bad investing. Research on thousands of families finds about 70% of transfers fail by the second generation, mostly from broken communication and heirs who were never prepared. The inheritance that actually lasts is*judgment, shared values, and an early, honest money conversation*, not just the estate documents.

The number everyone plans for, and the one they miss

The Great Wealth Transfer is projected to move roughly $84 trillion through 2045, with 42% of those dollars coming from just 1.5% of households [Cerulli Associates]. Yet, about 70% of wealth transfers fail by the second generation, according to research by Williams and Preisser tracking 3,250 families [Kitces]. The failure isn't usually due to taxes or legal issues; it's often about communication and trust within the family.

Why estates fail, and it is almost never taxes

Williams and Preisser's research found that 60% of these failures are due to communication and trust breakdowns, 25% are because heirs are unprepared, and only about 15% are due to taxes, legal issues, or investment mistakes [Kitces].
In my experience, that is exactly backwards from how most families spend their energy. They pour years into preparing the assets, the trust, the tax plan, the entity, and almost no time into preparing the people who will receive them.Often the plan is well prepared, and the heirs are not.

What actually transfers: judgment, values, and the conversation

The true inheritance is not just financial assets but the values and judgment passed down. Ethical wills, or legacy letters, are one way to document non-material legacies of values [NIH/PMC]. These tools help the next generation understand not just what they are inheriting, but how to carry it.
After 33 years, the pattern I see is simple: heirs who were handed money they were never taught to steward tend to do one of two things:freeze or overspend. The ones who keep it were taught judgment long before they were handed a balance.

Three things you can do this year

Hold one honest family meeting

In my experience, one of the most useful things you can do in a wealth transition is hold the first honest family meeting, and most families schedule it about ten years too late. Get everyone in a room,talk about values before numbers, and let your heirs ask the questions they have been afraid to ask. In my experience, families rarely regret starting that conversation early.

Write a legacy letter

Alongside your legal will, consider writing a legacy letter to share your values and life lessons. This can provide guidance and context for your heirs beyond the financial aspects [NIH/PMC].

Bring your heirs into the advisor relationship

Involving your heirs in meetings with your financial advisor can help them understand the nuances of wealth management and prepare them for future decisions [Cerulli Associates].

The honest caveat: done wrong, this backfires

It's important to approach these conversations carefully. Disclosing too much too early can lead to entitlement or demotivation. The key is to balance transparency with guidance, ensuring heirs are prepared without feeling overwhelmed.

Frequently Asked Questions

How do I talk to my kids about money without spoiling them?Start with values and responsibilities before discussing specific amounts. Focus on stewardship and the importance of managing wealth wisely.When should heirs learn the details of the inheritance?Introduce them to the concepts early, but gradually reveal details as they mature and demonstrate readiness.What is a legacy letter or ethical will?A legacy letter is a document that shares your values, life lessons, and hopes for the future, complementing the legal aspects of a will.Why do most families lose their wealth by the third generation?Research shows that communication breakdowns and unprepared heirs are the main reasons for wealth loss, not taxes or legal issues.Should I bring my children to a meeting with my financial advisor?Yes, involving them early can help them understand wealth management and prepare them for future responsibilities.

Where to go next

If you want to go deeper, here isthe one habit that separates lasting family fortunes, how families think abouttransferring wealth in a down market, and whatTexas estate planning before a salelooks like in practice.
And if you are within a few years of handing something down and want a second set of eyes on the plan for the people, not just the assets, that is a conversation worth having.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC.

Stress-Test Portfolio Concentration Amid Stretched Valuations and Rising Rates

Doug Greenberg — Sat, 20 Jun 2026 21:50:07 +0000

After more than 30 years of helping investors and business owners manage money through full market cycles, I have learned to pay attention when something feels off. Right now, something does. Stock valuations are stretched to levels we have not seen in a generation, and the market is rewarding the wrong things. That is the moment to*stress-test portfolio concentration*, not after the headlines turn.

Why stretched valuations have me cautious

When prices climb far faster than earnings, the market is running on momentum instead of fundamentals. We are seeing companies that lose money outrun companies that actually make it. When price stops paying attention to profit, that is not a market doing its job, that is a crowd leaning the same direction. High valuations do not tell you a correction is coming, and I cannot predict the timing of one. What they do tell you is that there is very little cushion left if sentiment shifts, inflation surprises, or the Federal Reserve changes course. You can follow the Fed's own policy path through itsFOMC meeting calendar and statements.

The risk almost no one is positioned for

Here is the part that keeps my attention. Most investors are leaning the same way, still expecting rate cuts and still crowded into the same handful of names. When everyone is positioned for one outcome, the painful surprise is usually the opposite one. In this case, that surprise is bond yields moving higher rather than lower. Rising long-term yields pressure exactly the assets that have done all the heavy lifting: expensive, high-growth, often unprofitable companies whose value depends on cash flows years down the road. You can track where yields actually sit using the Treasury's publisheddaily interest rate statistics.

Where concentration hides

Most people do not think they have a concentration problem until we look under the hood together. If you own broad index funds, you may be far more exposed to a small group of large growth names than you realize, because those names now make up an outsized share of the index. If you are a business owner, your concentration may be even larger, because your company itself is your biggest single asset. Add a portfolio that leans the same direction as your business, and a single shift in rates or sentiment can hit you twice.

How I stress-test a portfolio

The only thing we can really control in the investment process is risk, so that is where I start. Here is the practical work I walk clients through right now:

Measure rate sensitivity. Look at how much of the portfolio depends on long-duration growth assets that lose value when yields rise.
Find the real concentration. Add up exposure to the few names doing most of the work, inside and outside of index funds, and include the business itself.
Run the bad day on paper. Model what a meaningful drop in those crowded names would do to the total picture, before it happens, not after.
Right-size, do not bail out. Trim where the risk is larger than the goal requires, and rebuild balance across sectors and asset classes.
Match the portfolio to the plan. Tie every position back to what the money is actually for, instead of chasing the trend of the moment.

What I am not saying

I am not telling anyone to run for the exits or to try to time a top. I have watched too many people sell in fear, miss the recovery, and never make the money back. Market timing is not a plan. The goal is to remove the emotion from the decision and come back to the numbers, so you are making changes from a position of strength while things are calm, not from panic when things are not. We are heading into the August through October stretch, which has historically been the choppiest part of the year. That is a good reason to look under the hood now, while we are still up here and thinking clearly.

Frequently Asked Questions

What does it mean to stress-test portfolio concentration?It means measuring how much of your wealth depends on a small group of similar holdings, then modeling how a sharp move in those holdings would affect your whole financial picture before it happens.Why are rising bond yields a risk for stock investors?Higher long-term yields tend to pressure expensive, high-growth companies the most, because their value rests on cash flows far in the future. Many investors are positioned for falling rates instead.I own index funds. Am I still concentrated?Possibly. A handful of large growth names now make up an outsized share of major indexes, so a broad fund can carry more single-name risk than it appears to on the surface.Should I sell stocks before a possible correction?In my view, trying to time a top usually costs more than it saves. The better approach is right-sizing risk to your goals so you can stay invested through volatility.How does this apply to business owners specifically?Your company is often your largest single asset. If your investment portfolio leans the same direction as your business, a single shift in rates or sentiment can hurt you in two places at once.

Work with Pinnacle Wealth Advisory

If any of this applies to your portfolio or your business, it might be worth a conversation:explore working with Pinnacle Wealth Advisory.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Investing involves risk, including possible loss of principal. Consult with qualified professionals for guidance tailored to your specific situation. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC.

Quality of Earnings Report: Protect Your Business Sale

Doug Greenberg — Thu, 18 Jun 2026 21:54:48 +0000

How a Quality of Earnings Report Protects Your Business Sale

If you own a business and are thinking about selling, understanding the importance of a*quality of earnings report*(QoE) is crucial. In my 33 years advising owners, I've seen too many deals fall apart because of surprises that a QoE could have caught. A sell-side QoE is an independent analysis of your company's earnings, ensuring they are real, recurring, and sustainable. This proactive step can prevent last-minute deal repricing or cancellations.

What is a Quality of Earnings Report?

A QoE report is not the same as an audit. While an audit verifies financial statements, a QoE dives deeper into the sustainability of earnings. It focuses on normalizing EBITDA, identifying non-recurring items, and ensuring revenue recognition practices are sound.

Quality of Earnings vs. an Audit

Unlike an audit, which is a formal examination of financial records, a QoE report is more about understanding the true operational profitability of a business. It looks beyond the numbers to assess the quality of those earnings.

What "Normalized EBITDA" Actually Means

Normalized EBITDA adjusts earnings to remove anomalies, providing a clearer picture of a company's financial health. This includes adjusting for one-time expenses or revenues that do not reflect ongoing operations.

Why Do Business Sales Fall Apart in Due Diligence?

Many business sales fail during due diligence because of earnings surprises. When a buyer discovers discrepancies in reported earnings, it can lead to price retrades or even deal cancellations. According to a 2026 M&A survey, earnings discrepancies are a leading cause of failed transactions.

The Earnings Surprises That Trigger Price Retrades

Surprises such as unreported liabilities, inconsistent revenue streams, or aggressive accounting practices can undermine buyer confidence, leading to renegotiations or withdrawal from the deal.

What Does a Sell-Side Quality of Earnings Report Catch?

A QoE report can identify add-backs you can defend and those that might collapse under scrutiny. It also examines working capital, customer concentration, and one-time revenue items.

Add-Backs You Can Defend vs. Add-Backs That Collapse

Defensible add-backs are well-documented and justifiable, while those that collapse lack proper support and can be challenged by buyers.

Working Capital, Customer Concentration, and One-Time Revenue

These elements are crucial in assessing the sustainability of earnings. A QoE report ensures they are accurately represented and understood.

When Should You Commission a Quality of Earnings Report?

Commissioning a QoE report should be part of your pre-sale preparations, ideally 12-36 months before going to market. This timing allows you to address any issues well before buyers begin their due diligence.

How Much Does a Quality of Earnings Report Cost?

The cost of a QoE report varies but is typically a fraction of the potential loss from a repriced or failed deal. Investing in a QoE is a strategic move to protect your sale price.

How a QoE Protects the Proceeds That Fund Your Retirement

Ultimately, a QoE report safeguards the proceeds from your business sale, ensuring they align with your retirement and wealth management plans. By preventing surprises, you maintain control over the sale process and the final price.

Frequently Asked Questions

What is a quality of earnings report?A quality of earnings report is an independent analysis of a company's earnings to ensure they are real, recurring, and sustainable.What is the difference between a QoE and an audit?A QoE focuses on the sustainability of earnings, while an audit verifies financial statement accuracy.Do I need a quality of earnings report to sell my business?While not mandatory, a QoE report can prevent surprises during due diligence and protect your sale price.How much does a sell-side QoE cost?The cost varies but is generally a small investment compared to the potential loss from a failed deal.How long does a quality of earnings report take?A QoE report typically takes several weeks to complete, depending on the complexity of the business.What is normalized or adjusted EBITDA?Normalized EBITDA adjusts earnings to remove anomalies, providing a clearer picture of financial health.

Work with Pinnacle Wealth Advisory

If you're considering selling your business, understanding the role of a quality of earnings report is crucial. It might be worth a conversation to explore how this fits into your exit strategy:Learn more about exit planning.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC.

Why Hitting Your Number Never Feels Like Enough: A Wealth Advisor's Honest Reflection

Doug Greenberg — Sun, 14 Jun 2026 18:19:14 +0000

Why Hitting Your Number Never Feels Like Enough: A Wealth Advisor's Honest Reflection

In 33 years advising business owners, I have watched smart, successful people hit the number they once called life-changing, and then quietly reset it higher within months.Why hitting your number never feels like enough is not a math problem. It is a psychology problem.And most financial plans never address it. If you own a business and are thinking about what comes after, this reflection is for you.

Key Takeaways

The "enough" number keeps moving.According to theCharles Schwab 2025 Modern Wealth Survey, Americans now say it takes $2.3 million to be considered wealthy, down from $2.5 million in 2024, yet most millionaires still do not feel wealthy.
Lifestyle creep is the quiet engine.As income rises, spending rises with it. The finish line moves on its own.
Autonomy matters more than the balance.Research published in theProceedings of the National Academy of Sciencesfound that the income-happiness relationship runs largely through feeling in control of your life, not through the dollar figure itself.
The question most plans skip:What is the money for? Owners who answer that question before they sell feel far more settled after.
A defined purpose beats a bigger number.The clients I have seen feel genuinely at peace are not always the wealthiest. They are the ones who named their finish line in human terms.

The Number Americans Say Makes You Wealthy Keeps Changing

Here is a fact worth sitting with. According to theCharles Schwab 2025 Modern Wealth Survey, Americans say it takes*$2.3 millionto be considered wealthy. That is down from $2.5 million in 2024. The same survey puts "financially comfortable" at roughly$839,000.
Notice what is happening. The number is not fixed. It moves year to year. And the gap between "comfortable" and "wealthy" is itself a moving target.
Now here is the part that should stop you cold.A large share of actual millionaires do not feel wealthy.*The Schwab survey found that 45% of Americans now define wealth as happiness, and 37% define it as good health, not a dollar figure at all. The people who have the money are quietly redefining what the money means.
That is not a coincidence. That is a pattern.

Why the People Who Hit the Number Still Don't Feel It

There is a concept in behavioral economics called*hedonic adaptation. In plain English: humans adjust quickly to new circumstances. A raise, a bonus, a liquidity event, all of it feels extraordinary for a short time. Then it becomes the new normal. Then the bar moves.
For high earners,lifestyle creepis the quiet engine that keeps the number moving. Lifestyle creep means your spending rises as your income rises. A bigger house. Private school tuition. A second property. Each upgrade feels earned and reasonable. Each one also raises the floor of what you need to feel secure.
I worked with a business owner, a composite of several clients I have advised over the years, who sold a company after more than a decade of building it. For illustrative purposes only: this owner had named a number years earlier, a figure they called "set for life." They hit it. The deal closed. And within about a year, they were quietly anxious. Not because anything had gone wrong. But because nothing in the plan had ever defined what "set for life" actually meant in daily terms. The number had been the finish line, but there was no picture of what waited on the other side.
That pattern is not rare. It is one of the most common things I see in post-exit planning.*Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes. Doug Greenberg is an investment adviser representative of SB Advisory LLC, a registered investment adviser.

What Actually Moves the Feeling: Autonomy and Purpose, Not Balance

A landmark study published in theProceedings of the National Academy of Sciencesby researchers Matthew Killingsworth and Daniel Kahneman found that the relationship between income and emotional well-being is real, but it runs primarily through a person's sense of control over their own life.Autonomy, not the account balance, is the driver.
I have seen this play out in practice. The clients who feel the most settled after a liquidity event are not always the ones with the largest proceeds. They are the ones who came into the process having already answered a simple question:What is this money for?
That question sounds almost too simple. But in 33 years, I can count on one hand the number of owners who had a clear answer before I asked it. Most had a number. Almost none had a purpose.
Purpose might mean funding a grandchild's education. It might mean giving to a cause that mattered long before the business existed. It might mean buying back time, the freedom to work on what you choose, when you choose. Whatever it is, naming it transforms the number from a moving target into a tool. And that shift changes everything about how the money feels.
If you are thinking aboutexit planningand have not yet answered that question, it is worth doing before the deal closes, not after.

How to Set a Finish Line You Can Actually Reach

Here are four things I have seen make a real difference for owners navigating this question. These are not guarantees. They are patterns from practice.

Define purpose before the number.Write down what the money is for in plain language. Not "financial security," but specifically: what does a good week look like five years after the sale?
Separate "comfortable" from "wealthy" on paper.The Schwab data shows these are different thresholds. Know which one you are actually targeting and why.
Pre-commit a spending, giving, and legacy plan.Owners who arrive at closing with a rough framework for how proceeds will be allocated feel far less adrift than those who figure it out afterward. Awealth managementplan built around your life goals, not just your portfolio, is the difference.
Revisit the plan annually.Life changes. Goals shift. An annual review keeps the finish line honest and prevents the goalpost from drifting without your noticing.
Address the fear of outliving your money directly.A lot of post-exit anxiety is really about sequence risk, the worry that a bad market early in retirement could derail everything. Understandingthe fear of outliving your money in early retirementis a separate conversation worth having before you need it.

The Point

The number you are chasing is not wrong. Having financial security matters. Money genuinely does reduce stress and expand your options. But*a number without a purpose is a treadmill, not a finish line.*The owners I have seen feel truly settled after an exit are the ones who defined what they were running toward, not just what they were running from. That clarity does not come from a bigger balance. It comes from a harder conversation, one most financial plans never start.
If you have ever wondered why the number keeps moving, you are not alone. And you are asking exactly the right question.

Frequently Asked Questions

How much money is enough to feel wealthy in 2026?According to theCharles Schwab 2025 Modern Wealth Survey, Americans say it takes $2.3 million to be considered wealthy, down from $2.5 million in 2024. Financial comfort is pegged at roughly $839,000. But the survey also found that a large share of actual millionaires do not feel wealthy, and 45% of Americans now define wealth as happiness rather than a dollar figure. The number is a starting point, not a finish line.Why don't I feel rich even though I have millions?Hedonic adaptation is the most common explanation. Humans adjust quickly to new circumstances, and what once felt extraordinary becomes the new normal. Lifestyle creep, rising spending that tracks rising income, raises the floor of what feels necessary. Research published in the Proceedings of the National Academy of Sciences found that the income-happiness relationship runs primarily through a sense of autonomy and control, not the balance itself. If your plan never defined what the money was for, the feeling of "enough" has no anchor.What is lifestyle creep and how does it affect high earners?Lifestyle creep is the gradual increase in spending that accompanies increases in income or net worth. For high earners and business owners, it often shows up as larger homes, private school tuition, second properties, or upgraded travel. Each expense feels earned and reasonable in isolation. Collectively, they raise the minimum threshold of what feels financially secure, which is why the "enough" number keeps moving upward even as wealth grows.Does more money make you happier?The research is nuanced. A 2023 adversarial collaboration published in theProceedings of the National Academy of Sciencesby Matthew Killingsworth and Daniel Kahneman found that emotional well-being does continue to rise with income for most people, but the mechanism is largely autonomy, the feeling of being in control of your own life, rather than the dollar figure itself. Money matters. But what it buys in terms of freedom and purpose matters more than the number on the statement.How do I decide what "enough" means for me?Start by answering a question most financial plans skip: What is the money for? Not "financial security" in the abstract, but specifically, what does a good week look like five years after you stop working? Define purpose before you define the number. Separate "financially comfortable" from "wealthy" on paper, since the Schwab data shows these are genuinely different thresholds. Then build a spending, giving, and legacy framework around those answers before a liquidity event closes, not after. That sequence changes how the money feels from day one.

Work with Pinnacle Wealth Advisory

If any of this resonates with where you are right now, it might be worth a conversation. The question of what your money is for is one I ask every owner I work with. It is also the question that shapes everything else: how you invest, how you give, how you plan for what comes after the sale. If you are ready to think aboutwhat comes after your exit, here is where to start.
You can also explore how owners with significant liquidity think aboutinvesting a large liquidity event like a family office, or read aboutstaying invested instead of trying to time your exit.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC. Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes. Doug Greenberg is an investment adviser representative of SB Advisory LLC, a registered investment adviser.

Inflation Protection Strategies for Business Owners When Prices Keep Rising

Doug Greenberg — Thu, 11 Jun 2026 16:39:17 +0000

Inflation protection strategiesmatter more right now than they have in years. The annual inflation rate hit*4.2%*for the 12 months ending May 2026, up from 3.8% the month before, according to theU. S. Bureau of Labor Statistics. In 33 years advising business owners and pre-retirees, I have watched inflation quietly destroy more wealth than almost any market crash. If you own a business, hold concentrated stock, or are approaching a liquidity event, this is the moment to act.

Key Takeaways

Inflation is at 4.2%as of May 2026, the highest reading in recent months.
Energy costsare leading the surge, up 23.5% over the past year, according to the Bureau of Labor Statistics.
Cash sitting idle loses valueevery single month in a 4%+ inflation environment.
Real assets, I Bonds, and diversified portfoliosare the core tools for purchasing power protection.
Business owners face a double threat:rising input costs AND eroding personal wealth simultaneously.

What Is Actually Happening With Inflation Right Now

Inflation is not a single number. It is a collection of price pressures hitting different parts of your life and your business at different speeds.
According to the Bureau of Labor Statistics, headline inflation was*4.2%in May 2026, while core inflation (which strips out food and energy) was2.9%. That gap tells you something important. The pain you feel at the gas pump and the grocery store is real and severe. It is not just a statistical blip.
Energy was the single biggest driver. The energy index rose3.9%in May alone and23.5%*over the prior 12 months, as disruptions to oil supply pushed prices at the pump sharply higher. As theMay 2026 inflation breakdownshows, energy alone accounted for more than 60% of the monthly increase. These are not abstract percentages. They are real costs hitting your household and your business every week.

The 4 Things Business Owners Must Know About Inflation and Wealth

1. Cash Is a Losing Position Right Now

Holding large amounts of cash feels safe. It is not. At 4.2% inflation, every dollar sitting in a low-yield account loses purchasing power every single month. This is the silent tax that most owners ignore.
That said, cash is not worthless. Competitive high-yield savings and money market accounts have recently offered APYs in the range of roughly*3.50% to 4.10%*. That is still below the 4.2% inflation rate, but it narrows the gap significantly. If you have cash reserves, they should be working harder than a standard checking account.

2. I Bonds Offer a Government-Backed Inflation Hedge

Series I Savings Bonds (I Bonds) are issued by the U. S. Treasury and adjust their yield based on inflation. According to theU. S. Treasury, I Bonds issued from November 2025 through April 2026 carry a fixed rate of*0.90%and an inflation component of3.12%, for a composite yield of4.03%*for the first six months.
I Bonds have purchase limits per person per year, so they are not a complete solution. But for the conservative portion of a portfolio, they are one of the few instruments that directly tracks inflation. They are worth understanding as part of a broaderwealth managementstrategy.

3. Real Assets Protect Purchasing Power Over Time

Real assets include real estate, commodities, infrastructure, and businesses with pricing power. These tend to rise in value alongside inflation because their underlying worth is tied to physical things, not paper promises.
Hypothetical example: a business owner with $5M in liquid proceeds from a partial sale might allocate a portion to real estate investment trusts (REITs) or commodity-linked funds as an inflation hedge. This is illustrative only; actual allocations depend on individual tax situation, time horizon, and risk tolerance. Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes.
The key is diversification. No single asset class wins in every inflation environment. A well-structured portfolio spreads risk across multiple inflation-sensitive categories.

4. Your Business Itself Is Both Exposed and Protected

Here is the tension most owners miss. Your business faces rising input costs, from energy to labor to raw materials. That is the exposure side. But if your business has genuine pricing power, meaning customers will pay more without walking away, it is also an inflation hedge.
Businesses with recurring revenue, strong brand loyalty, or essential services tend to pass inflation through to customers more easily. Businesses with thin margins and commodity inputs get squeezed. Understanding which category you are in shapes both your operating decisions and yourexit planningtimeline.

A Texas-Friendly Way to Think About This

Think of your wealth like a ranch in a drought. The land is still there. The cattle are still there. But if you are not actively managing the water supply, the whole operation suffers quietly over time. Inflation is the drought. You do not always see it coming fast. But if you ignore it long enough, the damage is real and hard to reverse.
The rancher who survives a drought is the one who diversified water sources before the dry spell hit. The same logic applies to your portfolio. Diversifying across asset classes, adjusting cash positions, and building inflation-sensitive holdings before you need them is the move.

What You Can Do Right Now

Move idle cashinto high-yield savings or money market accounts offering 3.50% to 4.10% APY.
Consider I Bondsfor the conservative portion of your portfolio, up to annual purchase limits.
Review your asset allocationfor real asset exposure, including real estate and commodities.
Assess your business's pricing powerand whether your margins can absorb continued input cost increases.
Revisit your tax strategywith an advisor, because inflation changes the real value of deferred tax liabilities and installment sale proceeds.
Do not let a liquidity event sit in cashfor months without a deployment plan. At 4.2% inflation, time costs money.

The Bottom Line on Purchasing Power Protection

Inflation at 4.2% is not a crisis. But it is a slow leak. And slow leaks sink ships if you do not patch them. The owners who protect their purchasing power are not the ones who panic. They are the ones who have a plan before the numbers get worse.
In 33 years of advising owners through multiple inflation cycles, the pattern is consistent. The owners who act early, diversify thoughtfully, and coordinate their investment strategy with their tax situation come out ahead. The ones who wait for certainty often wait too long.
If you are sitting on business proceeds, concentrated stock, or a portfolio that has not been reviewed in the last 12 months, now is the time to look at it through an inflation lens. Learn more about howtax strategyintersects with inflation planning for business owners.

Frequently Asked Questions

What is the current inflation rate in the United States?According to U. S. Labor Department data released June 10, 2026, the annual inflation rate was 4.2% for the 12 months ending May 2026, up from 3.8% the prior month. Core inflation, which excludes food and energy, was 2.9% in May 2026, per the Bureau of Labor Statistics.How do I Bonds protect against inflation?Series I Savings Bonds are issued by the U. S. Treasury and include an inflation adjustment component that resets every six months based on CPI data. I Bonds issued from November 2025 through April 2026 had a composite yield of 4.03%, combining a 0.90% fixed rate and a 3.12% inflation adjustment, according to the U. S. Treasury. There are annual purchase limits per person, so they work best as one piece of a broader inflation protection strategy.What are the best inflation hedge investments for business owners?Inflation hedge investments for business owners typically include real assets such as real estate and commodities, Treasury Inflation-Protected Securities (TIPS), I Bonds, and equities in businesses with strong pricing power. High-yield savings and money market accounts offering 3.50% to 4.10% APY can also reduce the drag of holding cash. The right mix depends on your tax situation, time horizon, and liquidity needs.How does inflation affect a business sale or exit?Inflation affects exit planning in several ways. Rising input costs can compress margins and reduce EBITDA, which directly lowers valuation multiples. Inflation also erodes the real value of installment sale proceeds received over time. If you are planning an exit, it is worth reviewing your deal structure with an advisor to understand how inflation interacts with your after-tax proceeds.Should I move cash out of a checking account during high inflation?Yes, in most cases. At 4.2% inflation, cash in a standard checking account loses purchasing power every month. Competitive high-yield savings and money market accounts have recently offered APYs of roughly 3.50% to 4.10%. That does not fully offset inflation, but it significantly narrows the gap. For larger cash positions, a broader review of your asset allocation is warranted.How does inflation affect purchasing power for pre-retirees?For pre-retirees, inflation is one of the most serious long-term risks. A 4.2% annual inflation rate means that the purchasing power of a fixed dollar amount roughly halves over 17 years. Pre-retirees need portfolios that include inflation-sensitive assets, not just bonds and cash. Working with a fee-only advisor to stress-test your retirement income against various inflation scenarios is a prudent step.

Work with Pinnacle Wealth Advisory

If the 4.2% inflation rate has you rethinking your portfolio, your cash position, or your exit timeline, it might be worth a conversation. At Pinnacle Wealth Advisory, we work with business owners and pre-retirees on the full picture: investment strategy, tax planning, and wealth protection. If this would be useful for your situation, here is where to start:pnwadvisory.com/exit-planning.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes. Doug Greenberg is an investment adviser representative of SB Advisory LLC, a registered investment adviser. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC.

Reps and Warranties in M&A: 5 Promises That Claw Money Back After You Sell

Doug Greenberg — Wed, 10 Jun 2026 13:36:16 +0000

You signed the purchase agreement. The wire hit your account. You celebrated. Then, eighteen months later, a letter arrived from the buyer's attorney.That letter can cost you real money.In 32 years advising business owners on exits, I have seen sellers lose six and seven figures after closing because of promises buried in their deal documents. Those promises are called*representations and warranties, and understanding them before you sign is one of the most important things you can do.
If you own a business and are thinking about selling, this post is for you.Reps and warranties in M&A*are legally binding statements you make about your business. If any of them turn out to be wrong, the buyer can come back for your money. Here is what you need to know.

Key Takeaways

Reps and warranties are promises you make about your businessat the time of sale. A breach can trigger a clawback of proceeds.
A typical deal includes 25 to 40 seller reps, covering financials, taxes, legal matters, operations, and more.
About one-third of M&A disputes in North Americastem from alleged breaches of seller reps and warranties, according to the American Bar Association.
Representations and warranties insurance (RWI)can shift the risk away from your personal balance sheet, but it has limits and costs.
Your wealth plan must account for post-closing exposurebefore you spend or invest your proceeds.

What Reps and Warranties Actually Are

Representations and warrantiesare factual statements you make in a purchase agreement. You are telling the buyer: "Here is the truth about my business." If those statements are later found to be false, even unintentionally, the buyer has legal grounds to seek compensation from you.
According to Acquisition Stars (February 2026), a typical deal includes*25 to 40 seller reps, grouped into four categories: fundamental, general, operational, and special. Each one is a potential liability. And according to the American Bar Association (March 2024), approximatelyone-third of M&A deal disputes in North Americaarise from an alleged breach of a seller's representations and warranties.
That is not a small number. One in three disputes.This is not a theoretical risk.*

The 5 Reps That Most Often Claw Money Back

1. Financial Statement Accuracy

You represent that your financial statements are accurate and prepared according to generally accepted accounting principles (GAAP).If the buyer finds revenue was overstated, expenses were hidden, or reserves were understated, this rep is breached.This is the most common source of post-closing claims. Even an honest accounting error can trigger it.
Hypothetical example: a business owner with $8M in proceeds might face a clawback demand if the buyer's post-closing audit reveals that a key customer contract was improperly recognized as revenue in the final year before sale. The dollar exposure could be significant relative to the escrow held back at closing.

2. Tax Compliance Representations

You represent that all tax returns have been filed, all taxes have been paid, and there are no pending audits or disputes with the IRS or state tax authorities.If a tax liability surfaces after closing, the buyer looks to you first.The IRS can audit returns going back three years in most cases, and up to six years if substantial understatement is involved, perIRS guidance on audit periods. That window overlaps directly with your post-closing indemnification period.
Tax reps are especially dangerousbecause the liability can be large, the discovery timeline is long, and the IRS does not care that you sold the business.

3. Material Contracts and Customer Relationships

You represent that all material contracts are valid, enforceable, and will survive the change of ownership.If a key customer has a change-of-control clause and walks after closing, that can breach this rep.You also represent that you have disclosed all material contracts. A contract you forgot to mention is a problem.
Hypothetical example: a business owner selling a $15M services company might represent that no customer accounts for more than 20% of revenue. If the buyer later discovers one client represented 30%, that misstatement is a breach, whether intentional or not.

4. Litigation and Legal Proceedings

You represent that there are no pending or threatened lawsuits, regulatory actions, or government investigations.A lawsuit filed the week before closing that you did not disclose is a breach.So is a regulatory inquiry you knew about but considered minor. Buyers take this rep seriously because undisclosed litigation can destroy the value they paid for.
The lesson here is simple:disclose everything, even if it feels embarrassing or minor.Your M&A attorney's job is to help you craft disclosure schedules that protect you. Use them.

5. Employee and Benefits Representations

You represent that your employment practices are lawful, your benefit plans are properly funded, and there are no wage-and-hour violations or discrimination claims.This rep catches sellers off guard more than almost any other.A misclassified contractor, an underfunded 401(k) match, or an unreported OSHA complaint can all trigger a claim. The Department of Labor and theEmployee Benefits Security Administration (EBSA)have broad authority to pursue violations, and that exposure travels with the deal.

Think of It Like a Home Inspection, But With Teeth

When you sell a house in Texas, you fill out a seller's disclosure notice. You check boxes about the roof, the foundation, the HVAC. If you check "no known issues" and the buyer finds a cracked foundation after closing, you have a problem.Reps and warranties in a business sale work the same way, except the dollar amounts are much larger and the legal teeth are much sharper.
The difference is that a home seller's liability is often limited to the cost of repair. In a business sale, a single breached rep can trigger indemnification claims that wipe out a meaningful portion of your proceeds.The escrow holdback exists precisely for this reason.

What You Can Do to Protect Yourself

Conduct pre-sale due diligence on yourself.Before the buyer's team arrives, audit your own financials, tax filings, contracts, and HR records. Find the problems first.
Build thorough disclosure schedules.Every exception to every rep should be listed. Disclosed issues generally cannot be the basis for a post-closing claim.
Negotiate the indemnification basket and cap.The basket is the minimum threshold before claims can be made. The cap limits your total exposure. Both are negotiable.
Consider representations and warranties insurance (RWI).RWI shifts the risk from your personal balance sheet to an insurance carrier. According to Cooley M&A (May 2024), approximately*55% of private transactions used RWI in 2023. Policy deductibles are often in the range of1 to 2% of deal value, per SRS Acquiom (January 2026). RWI pricing is typically4% to 8% of the coverage amount*, per Morgan & Westfield (June 2024). That cost must be weighed against the risk it transfers.
Do not spend all your proceeds immediately.Keep liquid reserves during the indemnification period, which typically runs 12 to 24 months for general reps and longer for fundamental reps and tax matters.
Work with a wealth advisor before closing, not after.Yourexit planning strategyshould account for post-closing exposure so your investment and tax decisions are made with the full picture.

The Real Point

Selling your business is not the finish line.It is the starting line for a new set of financial decisions.The proceeds you receive at closing may not all be yours to keep, at least not right away. Post-closing indemnification claims, escrow holdbacks, and earnout disputes are real. According to Cooley M&A (May 2024), carriers field claims on approximately*one in six RWI policies issued*. That means even insured sellers face post-closing scrutiny at a meaningful rate.
The owners who navigate this well are the ones who planned for it. They understood their exposure before they signed. They structured theirwealth managementaround the reality of a multi-year tail on their deal. And they did not make irreversible financial decisions with money that was still technically at risk.

Frequently Asked Questions

What are representations and warranties in an M&A deal?Representations and warranties are legally binding factual statements a seller makes about their business in a purchase agreement. They cover areas like financial accuracy, tax compliance, contracts, litigation, and employment practices. If any statement is later found to be false or incomplete, the buyer can seek financial compensation from the seller, even after the deal has closed.How long am I exposed to post-closing claims from reps and warranties?The indemnification period varies by rep type. General business reps typically survive for 12 to 24 months after closing. Fundamental reps, such as those covering ownership and authority to sell, often survive for the full statute of limitations period. Tax reps commonly survive until the applicable tax statute of limitations expires, which can be three to six years depending on the circumstances, per IRS guidelines.What is representations and warranties insurance (RWI) and should I get it?Representations and warranties insurance (RWI) is a policy that pays out if a seller's rep is later found to be breached. It shifts the financial risk from the seller's personal balance sheet to an insurance carrier. According to Cooley M&A (May 2024), approximately 55% of private transactions used RWI in 2023. Whether it makes sense depends on your deal size, risk profile, and the cost of coverage, which typically runs 4% to 8% of the coverage amount. A qualified advisor can help you weigh the trade-offs.What is an indemnification basket and cap?The indemnification basket is the minimum dollar threshold of losses a buyer must accumulate before they can make a claim against the seller. Think of it as a deductible. The cap is the maximum total amount the seller can be required to pay in indemnification claims. Both are negotiated terms. Sellers generally want a higher basket and a lower cap to limit their exposure. These are critical negotiating points in any deal.How does post-closing exposure affect my wealth plan after selling a business?Post-closing exposure means that a portion of your sale proceeds may remain at risk for months or years after closing. This affects how you should invest, how much liquidity you should maintain, and how aggressively you can pursue tax strategies with your proceeds. A wealth advisor who specializes in post-exit planning can help you structure your finances to account for this tail risk while still making your money work for you during the indemnification period.What is an escrow holdback and how does it relate to reps and warranties?An escrow holdback is a portion of the purchase price that is held in a third-party escrow account after closing. It serves as a readily accessible fund for the buyer to draw from if a rep is breached. Holdbacks are typically 5% to 15% of the purchase price and are held for the duration of the indemnification period. The seller receives the escrowed funds only if no valid claims are made before the escrow release date.

Work with Pinnacle Wealth Advisory

If you are preparing to sell your business or have recently closed a deal, understanding your post-closing exposure is a critical part of protecting what you built. At Pinnacle Wealth Advisory, we help business owners think through the full picture, before and after the wire hits. If this would be useful for your situation, here is where to start:schedule a conversation with Doug Greenberg at Pinnacle Wealth Advisory.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC. Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes. Doug Greenberg is an investment adviser representative of SB Advisory LLC, a registered investment adviser.

Should You Move to Cash Before the Fed Meets? A Fiduciary Explains

Doug Greenberg — Tue, 09 Jun 2026 16:55:35 +0000

Should You Move to Cash Before the Fed Meets? A Fiduciary Explains

For a long-term investor, moving to cash before a scheduled Fed meeting is almost always a mistake.Markets are forward-looking. The expected decision is already priced in long before the announcement. Going to cash is really two bets: when to sell, and when to buy back. Missing only a handful of the market's best days can cut long-run returns sharply.Act on a change in your goals, not on the calendar.

Key Takeaways

The Fed's expected move is already priced inbefore the meeting happens.
Going to cash is two decisions,not one. Most investors nail the first and miss the second.
Missing the market's best daysis the most common way reactive investors destroy long-term wealth.
React to changes in your goals or time horizon,not to a scheduled event on the Fed calendar.
A real cash bucketfor near-term needs lets the rest of your portfolio stay invested through volatility.

A Client Wanted to Sell Everything Before the June Meeting

Hypothetical example: imagine a business owner with a large, concentrated portfolio calling a few days before theFederal Reserve's June 16-17, 2026 FOMC meeting. The federal funds rate is currently at*3.50 to 3.75 percent, and the owner has read every headline. He wants to move everything to cash. Now.
In this scenario, the advisor asks one question:"What has to be true a year from now for this to have been the right call?"*
Silence. Then:"I guess the Fed would have had to surprise everyone, and the market would have had to drop a lot, and I would have had to know exactly when to get back in."
That is the whole answer.Three things all have to go right.And in 32 years of advising owners through Fed cycles, I have rarely seen all three land in the same quarter.
This example is for illustrative purposes. Individual results depend on facts and circumstances. Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes.

Why Moving to Cash Before the Fed Rarely Works

The Market Has Already Priced In What the Fed Is Expected to Do

Markets are forward-looking machines.Traders, algorithms, and institutional desks have been pricing the June decision for weeks. The CME FedWatch tool shows market-implied odds of a hold at the current 3.50 to 3.75 percent range. That expectation is already embedded in stock prices, bond yields, and currency markets.
When the Fed announces what everyone expected, nothing moves much.The only thing that moves markets is surprise.And a fully telegraphed, consensus-expected decision is the opposite of a surprise.
TheBureau of Labor Statistics CPI release on June 10is the last major inflation reading before the meeting. A soft print could shift expectations slightly. But even then, the market will have repriced before you finish reading the headline.

Going to Cash Is Two Decisions, and the Second One Is Brutal

This is the trap most investors do not see coming.Selling feels like one decision. It is not. It is two: when to get out, and when to get back in.
The first decision is easy. Fear makes it feel obvious. The second decision is brutal.There is never a moment when the news is good enough, the headlines calm enough, or the market cheap enough to feel safe re-entering.So investors sit in cash. Weeks become months. The market recovers without them.
In my experience advising owners through multiple Fed cycles, the clients who damaged their long-term wealth most were not the ones who stayed through a bad market. They were the ones who left a scary one and could not figure out when to come back.

The Cost of Missing the Market's Best Days

The math on this is unforgiving.According to research published by J. P. Morgan Asset Management, missing just the ten best trading days in a given decade can cut long-run portfolio returns by more than half. The problem: those best days tend to cluster right around the worst days.If you are in cash during the panic, you are usually in cash during the recovery too.
According toJ. P. Morgan's 2026 Business Leaders Outlook, 73 percent of business leaders expect to increase revenue this year, and 64 percent project higher profits. That underlying economic confidence does not square with a portfolio positioned for catastrophe.
For more on how staying invested through uncertainty protects long-term wealth, seewhy the best investors stay in their seats.

When Reacting to a Headline Actually Makes Sense

Not every urge to act is wrong.There are real situations where adjusting your portfolio before or after a Fed meeting is the right call. The key is knowing the difference between a change in your situation and a change in the news cycle.
React when any of these are true:

Your time horizon has shortened. A planned liquidity event, a business sale, or a retirement date that moved up changes the math.
Your goals changed. A major purchase, a health event, or a family need that requires real cash in the next 12 months is a legitimate reason to hold more cash.
Your portfolio drifted far outside your target allocation. Rebalancing to your plan is not market timing. It is discipline.
You are taking on more risk than you can emotionally tolerate. If volatility is keeping you up at night, that is a signal to revisit your risk profile, not to panic-sell. Do not react when the only thing that changed is a headline.A scheduled Fed meeting, a CPI print, or a pundit's forecast is not a change in your goals. It is noise. For context on how rate expectations affect longer-term planning decisions, seewhy waiting for lower rates to sell a business backfires.

What to Do Instead During a Fed Week

The most valuable thing a fiduciary does during a Fed week is talk you out of doing something.But there are also constructive steps worth taking.

Revisit your plan, not your portfolio.Pull out your financial plan and ask whether anything in your life has changed, not whether the Fed might surprise.
Check your cash bucket.If you have real spending needs in the next 12 to 24 months, those dollars should already be in cash or short-term instruments, not in equities. That separation is what lets the rest of your portfolio stay invested.
Rebalance on policy, not panic.If a rate decision genuinely shifts the relative value of asset classes in your plan, a measured rebalance is appropriate. A wholesale move to cash is not.
Review your concentration risk.If a large portion of your net worth is in one stock, one sector, or one business, a Fed meeting is a good reminder to revisit that exposure through a structuredwealth managementreview, not a reactive cash move.
Call your advisor.Not to execute a trade. To talk through what you are feeling and why. That conversation is often the entire value of the relationship. For a deeper look at how sequence risk affects portfolios near a major liquidity event, seesequence-of-returns risk in early retirement.

The Point

The Fed meeting on June 16-17 is not a secret.It has been on the calendar for months. The market has been pricing it for weeks. The most likely outcome, a hold at 3.50 to 3.75 percent, is already reflected in asset prices. Moving to cash before a fully telegraphed, consensus-expected event is not protecting yourself. It is paying a transaction cost to exit and re-enter on a coin flip, and hoping you can time the second half of that trade better than the professionals who do this full time.
Discipline is not passive. It is a decision you make every time the urge to act shows up.The investors who build real wealth over time are not the ones who predicted every Fed move. They are the ones who stayed invested through the ones they could not predict.

Frequently Asked Questions

Should I move my portfolio to cash before an FOMC meeting?Generally, no. Moving to cash before a scheduled Fed meeting is a form of market timing that rarely works. The expected decision is already priced into markets before the announcement. Going to cash requires two correct decisions: when to sell and when to buy back. Missing even a small number of the market's best trading days can significantly reduce long-run returns. The exception is if your personal goals, time horizon, or liquidity needs have genuinely changed.Does the stock market go up or down after a Fed decision?It depends almost entirely on whether the decision surprises the market. When the Fed does what the market expected, price moves are usually modest. Large moves, up or down, tend to happen when the Fed surprises consensus expectations. Because the June 16-17 meeting outcome is widely anticipated as a hold at 3.50 to 3.75 percent (per Federal Reserve guidance), a dramatic market reaction in either direction would require a significant deviation from that expectation.Is it a mistake to sell stocks because of interest rates?Selling stocks purely in reaction to an anticipated rate decision is generally a mistake for long-term investors. Interest rate changes affect asset prices, but those effects are usually gradual and already partially reflected in prices before the announcement. A better approach is to review whether your asset allocation still matches your goals and time horizon, and rebalance methodically rather than reactively.How much cash should a long-term investor actually hold?A common framework is to hold enough cash or short-term instruments to cover 12 to 24 months of planned spending or near-term liquidity needs. This "cash bucket" lets the rest of your portfolio stay invested through volatility without forcing you to sell at a bad time. Holding more cash than that as a defensive posture against a scheduled Fed meeting is generally not a productive use of capital.What should I do with my investments during Fed week?The most productive actions during Fed week are: review your financial plan to confirm nothing in your personal situation has changed, verify your cash bucket covers near-term needs, and check whether your portfolio has drifted from your target allocation. If rebalancing is warranted, do it based on your plan, not on fear. Avoid making wholesale changes based on what you think the Fed will say or how the market might react in the short term.

Work with Pinnacle Wealth Advisory

If the urge to act before a Fed meeting sounds familiar, it might be worth a conversation. At Pinnacle Wealth Advisory, we help business owners and pre-retirees build portfolios designed to stay invested through exactly this kind of uncertainty. If this would be useful for your situation, here is where to start:schedule a conversation with Doug.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Results vary based on individual circumstances. Specific figures are illustrative, not guarantees of outcomes. Doug Greenberg is an investment adviser representative of SB Advisory LLC, a registered investment adviser. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC.

Sequence of Returns Risk: Avoid the Retirement Trap

Doug Greenberg — Mon, 08 Jun 2026 00:40:42 +0000

The Retirement Risk Nobody Warns You About Until It's Too Late

If you own a business and are thinking about selling, beware of*sequence of returns risk. This is one of the most underestimated forms ofretirement portfolio risk, and it can quietly drain your savings in its first five years.
It is not just about the market's ups and downs. It is about when those ups and downs happen. In my 32 years advising owners, I have seen this trap catch many newly retired business owners off guard.
**Key takeaways*

Sequence-of-returns risk is about the*order*of returns, not the average, and it is most dangerous in the first few years of retirement when you are withdrawing.
Selling a business concentrates the danger: your whole net worth becomes investable on a single day you did not choose.
You cannot control the market you retire into, but you can build a spending floor, hold reserves, and stage how you deploy a lump sum.

What is sequence-of-returns risk?

Sequence-of-returns risk is the danger that poor investment returns in the first few years of retirement, combined with the withdrawals you are making to live on, permanently shrink your portfolio, even if the market later recovers. Two retirees can earn the same average return over 30 years and end up in completely different places based only on the order those returns arrived. The first five years matter most. You cannot control them, but you can plan around them.

Why the order of returns matters more than the average

Picture two retirees with identical portfolios who both average the same return over their retirement, but in a different order. The one who hits poor returns early, while drawing income, can end up far worse off than the one who gets the same poor returns later. These figures are hypothetical and shown only to illustrate how the order of returns works; they are not a projection of any actual portfolio, and individual results depend on your own facts and circumstances.
The math behind safe withdrawal rates was first mapped byWilliam Bengen in his 1994 Journal of Financial Planning studyand later reinforced by the 1998Trinity Study, both of which showed why early losses are so dangerous for a portfolio you are drawing from.

A simple example: same average, very different outcomes

Consider two hypothetical retirees. Both experience the same average return over 30 years, but the order of those returns varies. One enjoys gains early on, while the other faces losses. The retiree with early gains can recover from later losses, while the other struggles to maintain their portfolio's value.

Why the first five years of retirement are the most dangerous

Retiring into a down market is the worst-case timing, because you are selling assets to fund living expenses at exactly the moment prices are depressed.

Withdrawals turn a paper loss into a permanent one

When you withdraw funds during a market downturn, you're locking in losses. This can permanently reduce your portfolio's value, making it harder to recover when the market rebounds.

Why recovery math works against you when you are spending

If your portfolio drops by 20%, you need a 25% gain to get back to even. But if you're withdrawing funds, the required recovery rate is even higher. This is why early losses can be so damaging.

The hidden version of this risk after selling a business

When your entire net worth becomes investable on a single day

After selling a business, your net worth often becomes liquid all at once. This creates a unique sequence-risk profile. Investing everything at once can expose you to significant risks if the market turns.

The "finish line" mistake I see owners make again and again

In my experience, here is the pattern I often see again and again. An owner will spend a decade getting the sale right: the tax structure, the earnout, the working-capital peg, every comma in the purchase agreement. Then they spend roughly zero minutes on the first five years after the money lands.
Picture a composite case, the kind I have sat across from many times. A manufacturing owner who built an unglamorous business over thirty years sells it, then wants to deploy the entire proceeds the same quarter, because waiting feels like leaving something on the table. I understand the instinct.
The hard part to hear is that the day you sell is not the finish line. It is the start of the most fragile window your money will ever sit in. This is sequence risk after selling, and deploying everything at once removes a choice you may wish you had kept.
I have written before aboutwhat actually happens after the sale closes, because the months right after a closing are when this risk does the most damage.

How to protect retirement income from a flat or down decade

Build a spending floorthat doesn't depend on the market.
Hold enough in reservesto avoid selling at the bottom.
Stage the deploymentof a lump sum instead of investing it all at once.
Separate the moneyyou need soon from the money you can leave alone. I have advised owners through four recessions now, and the same thing surprises people every time. The folks who came through a flat or falling market with their composure intact were not the ones holding cleverer funds or a hotter manager. What set the calm clients apart was simpler and far less glamorous. Before the market turned, they had already decided where their next few years of spending would come from, and it was not the part of the portfolio that was dropping. They were not forced to sell at a bad price to cover the mortgage that month. That mindset is not unique to retirees. It is how the very largest portfolios are run, and there are lessons inhow larger portfolios are structured for resilienceand inwhat four recessions taught me about staying invested.

What a "lost decade" would actually mean for a new retiree

If the market stagnates, retirees relying on investment returns for income may struggle. A flat or negative decade would mean lower-than-expected returns just as you start drawing income, which is exactly the setup that makes sequence risk bite. A2026 Morningstar discussion raised the possibility of a flat or negative "lost decade"for investors who are retiring now. Nobody can predict whether that happens, which is the point: the plan should not depend on the market cooperating.
Holding the entire proceeds in cash is not the answer either, as I explain inwhy parking the proceeds in cash creates its own risk. The investors who weather an early downturn are usually the ones who understandwhy time in the market beats timing it.

Frequently Asked Questions

What is sequence-of-returns risk in simple terms?Sequence-of-returns risk is the danger that poor returns early in retirement can permanently reduce your portfolio, even if the market later recovers.How many years of retirement carry the most sequence risk?The first five years of retirement carry the most sequence risk.Does sequence risk matter if I never withdraw from my portfolio?Sequence risk primarily affects those who withdraw from their portfolios, as withdrawals during downturns can lock in losses.How is sequence risk different from market risk?Sequence risk is about the order of returns, while market risk is about the overall market performance.I just sold my business, should I invest the proceeds all at once or gradually?It's often safer to stage the deployment of proceeds to mitigate sequence risk.What is a "bond tent" or "rising equity glide path"?These are strategies to adjust asset allocation over time to reduce risk.Can I avoid sequence risk by just holding cash?Holding cash can avoid sequence risk but may introduce inflation risk and opportunity cost.

Work with Pinnacle Wealth Advisory

If you are within five years of an exit or a retirement date and want a second opinion on how your plan holds up in a flat market,here is how to start a conversation.
This blog post is for informational purposes only and does not constitute legal, tax, or financial advice. Past performance does not guarantee future results. Consult with qualified professionals for guidance tailored to your specific situation. Doug may provide services and conduct business as Pinnacle Wealth Advisory with advisory services offered through SB Advisory, LLC. Registration as an investment adviser does not imply any certain level of skill or training.