Dale Shafer | Life Moves Wealth Management

Josh Hile: Welcome to the AdvisorView podcast for Citizen Mint. I’m Josh Hile, CEO of Citizen Mint, and, excited to delve into some origin story business journeys and just unique insights from some of the exceptional managers like Dale Shafer here. And maybe Dale, you can just talk about your firm, give us a quick background on how you started it, and your background just in general.

Dale Shafer: Yeah, yeah. Thanks for having me on, Josh. Really appreciate it. So my firm is called Life Moves Wealth Management. We’re based in Scottsdale, Arizona, and just celebrated our 4th birthday, which is a lot of fun.

Josh Hile: That’s—

Dale Shafer: thank you. Thank you. And I had 2 prior stops at a wirehouse and then at an independent kind of middle-of-the-road, a little more conservative broker-dealer. And then about, again, 4 years ago, decided to launch that on my own. And that was really just kind of the seeing a need to be able to do things for business owners and clients and marketing. And some people would rather have a video response, and sometimes, you know, a big compliance department makes that difficult. And so I really just wanted to make the advice delivery easy with the right technology, with the advances that we have in a lot of the technology now that helps deliver that advice. And clients have responded very well to it, and we’re continuing to grow every year. So that’s, uh, that’s the story.

Josh Hile: That’s amazing. And so maybe, um, you can just talk about, uh, the kind of clients you serve and like what’s kind of your focus.

Dale Shafer: Yeah, so currently the primary focus is for business owners. I have a unique— I think maybe all advisors say their clients are unique, but I have a fair number of business owners who are very unique and very broad in their business types. And, um, one of those business owners, a couple of years ago, we sat down for breakfast. I thought it was just going to be like a casual catch-up because that was our rhythm. And his question was how he could sell his business in the next year. And academically, I know how to do that. I know how to, you know, think about the tax planning and the cash flow planning. And I know how to read a P&L, so I can help them do that. But I needed more information. So, um, That client and a couple of others kind of pushed me into more of an exit planning, uh, specialty. And so I went out, took about 9 months to get educated and received a designation, wrote a valid exit plan that was peer-reviewed and all that fun stuff. So really, really good quality work there. And so, you know, currently have 2 clients who are in the process of exiting, and we’re learning a lot along the way. But that’s kind of the focus, is how How do we take a business owner who is traditionally underserved by wealth managers because everyone’s waiting for the transaction to occur so then they can manage money? How do we help them a couple of years before the transaction happens so that way they can prepare the business, prepare themselves, get a financial— an actual financial plan in place that moves as the expectations move throughout that exit process? And then when they’re ready to complete the transaction and they find a buyer and everything works successfully, now we’re just implementing the plan that we’ve already built. We’re not starting from the post-transaction assets. And so that’s been the focus primarily. And it’s just been a real shift in the way that I think about delivering advice. And it’s been a lot of fun.

Josh Hile: Yeah, that’s amazing. And I mean, I know that can be incredibly valuable for these owners, especially when they think about like taxes and the specifics around taxes and how to reduce those on exit. So I, I can imagine that’s a lot of conversations you’re getting. So how do you, in general, how are you finding your clients?

Dale Shafer: So I’ve been very blessed, I would say, kind of from the start. Uh, my clients refer their friends, so it’s very, very high referral. I don’t do a lot of marketing. It is, I have been told, a slower way to grow, but it’s a, from my perspective, a healthier way to grow. And it allows me some capacity to do really good work as more and more clients come in. I really try not to, you know, you’re kind of practicing on clients in some respects because you’re learning as you continue to go. But I think that the more that you can do that and build out a solid platform and a solid foundation, for the next client that comes in, you’re just a constant process of improvement. It works really well. And like I said, people are sending their friends over and it’s worked out, I think, better than I thought it would by now. And again, the word I always use is blessed, just very blessed to have great clients and great opportunities there.

Josh Hile: Yeah. And so maybe you talked about a little bit about your differentiation and kind of coming alongside business owners earlier in their journey, maybe before the exits. Happened. But, um, any other approaches that you take with clients around advice, planning, investing, um, that you believe is, you know, kind of a difference maker for you and your clients?

Dale Shafer: Yeah, I would say one of the other, um, primary difference makers is I’m a fee-only planner and I primarily charge a flat annual fee.

Josh Hile: Got it.

Dale Shafer: Um, so not doing very much with assets under management. Clients have appreciated that because we’re paying for most of the advice and not just because the market’s moving, which has been great. And what that allows me to do is if a client comes in and they have— so let’s say not all of my clients are business owners. Some of them are professionals and some of them are young professionals. And so all of their money is being pushed into a company-sponsored plan. Yep. Well, they can still pay for advice as to where other advisors would have to turn them away if there were no assets to manage.

Josh Hile: Yes.

Dale Shafer: And so what that allows me to do is be a guide for them while they’re still growing and saving. And, and maybe at some point that turns into a rollover, or maybe at some point they start building non-qualified assets or something like that. But it gives me the ability to serve people at a higher level whether or not they have assets to manage. But a lot of people do have assets to manage. And so it gives us the opportunity to be a little more agnostic about where those assets live.

Josh Hile: Yeah.

Dale Shafer: And so that means they can live in a brokerage account at one of the, you know, big custodians that aren’t charging them a fee for that account. They can live there. They can live in a company-sponsored plan. They can live in real estate. They can live— right. They can live in a lot of different places. And the, the goal here is let’s build wealth wherever it’s best to build wealth for that client. I’m agnostic to where that happens as long as it’s happening.

Josh Hile: Yeah, no, that’s definitely— and that’s probably a very different world from where you came from, from the broker-dealer side and the wirehouse side, which was— yeah, especially on the wirehouse where it’s like, hey, push it into our products, please.

Dale Shafer: Yes, and, and get the assets, and then once you have them, go get the next batch of assets and then the next batch of assets. And so, you know, it’s kind of like when I left the warehouse world, I felt like it was, you know, everybody that I was meeting had a number on their forehead, right? My job was to find that number. And I just, I think that the better way to do it is not let me go find the next pile of assets because it’s great to have assets under management. I mean, that’s a metric that’s industry-wide, But it’s even better to have client relationships that are paying ongoing fees for that advice. Um, it just works out really well.

Josh Hile: Yeah. Um, what about where you see the traditional wealth management model falling short? Where do you think the biggest gaps are there?

Dale Shafer: Um, I, I think that’s a tough question to answer because, um, you know, maybe it’s things like technology. And what— where that, I think, gets expressed is if you work for a very specific firm, that’s your tech stack.

Josh Hile: Yeah.

Dale Shafer: When you’re an independent RIA, you can choose that. And so you can do and pull in different tools that do different things. Um, I would say, you know, there’s still the, the mindset of having a, a broker, a stockbroker, uh, and that, that model definitely is not really, there’s, there’s no value in being a stock selector there anymore because, you know, most big firms have their own internal, uh, CFAs that are doing that work. Um, you can do that work on any of the AI, you know, LLM tools that you want, which— pick your favorite one, it can build you a stock portfolio of whatever you want. A lot of us have tools like YCharts that can build a really good stock portfolio, and, and it has its own little AI tools to help you do that. And so I think The ability to make the recommendation is still very important. I think being, you know, somebody who calls somebody and say, hey, we should sell this and buy this, right? Actively, I think that maybe is dying back a little bit, but I could be wrong. That could just be my bias speaking as well. But I think where it falls short is there’s a lot of people who don’t know that they can get access to advice until it’s a little further down in their career. And I think just like anything else, you know, the best day to plant a tree was 20 years ago, and the second best day is today.

Josh Hile: Yes.

Dale Shafer: So as long as people can get started wherever they are and they have a pathway to get good financial advice along the way, I think that’s going to lead to better outcomes for people. Because I don’t know what retirement looks like anymore for anybody. They often don’t know either. It’s kind of getting harder and harder to see. 10, 20, 30 years down the road. Sometimes it’s hard to see 12 months down the road for some people. And so if you can start there and deliver real-time advice for whatever they’re going through, and knowing that your plan’s built with the flexibility to make those adjustments— literally, that’s why my firm is called Life Moves Wealth. Yeah, because like it’s always in motion and you have to be able to make those adjustments and change things and alter the course to get to some destination that may not be where you thought it was. You know, a year ago, that destination may have moved. And so that’s, I think, where we fall short, is just getting the people soon enough.

Josh Hile: Yeah, yeah, definitely. Um, and I guess you mentioned a couple of these things, like type of client served is usually like entrepreneurs, um, and, um, maybe people earlier in their career. Anybody else that kind of falls into that demographic of where you’re seeing interest?

Dale Shafer: Yeah, I think, you know, C-suite professionals are always, you know, great people to help because they have a lot of things coming their way. They have RSUs, they have grants, they have options that are exercising, they have tax implications, they have higher salaries. There’s just— there’s a lot of things that move around for them especially that takes some really good focus and kind of complex planning. To help them do those things correctly. Because the— having, having a lot of money sometimes can, can be a big problem for some people. And so it’s a great problem to have if you have the things in place to make that work to your benefit and not have it get pulled away by inefficiency and taxes and cash flow just because you don’t have the information.

Josh Hile: Yeah. Yep. What about portfolios and how you think about you know, get the guidance you’re giving to your clients on structuring their portfolio versus maybe the traditional 60/40 model?

Dale Shafer: Yeah, the 60/40 model has been really tough over the past probably 10 years just because of the way the bond market’s been behaving. But, um, but I, I think the, the thing now is that we— there’s no certainty in any part of the market. There’s no consistency in leadership of the market. So The way that I was trained and the way that I still continue now is I don’t know what’s going to win this year or next year, and that may change even 2 months from now. So I want to own as many important parts of the market as possible. We want to be smart about where we put money into the market, right? So we don’t want to chase shiny objects because shiny objects become, you know, rather dull over time. And so as fast as they go up, they come right back down. And so I’m looking to build something that’s going to move and respond with the market, control some volatility as we all should. Um, but if I can smooth out the ride, then that’s the goal. If we can still get a good risk-adjusted return that’s not unreasonable or drastically underperforming whatever benchmark we’re setting, I think that that’s probably the key. So I’m looking to build things that are, they’re relatively boring. I’m, you know, a bit of a believer in the, you know, the Buffett and the Benjamin Graham school of thought where things should be boring. It should, yeah. Charlie Munger said it should be like watching grass clippings grow.

Josh Hile: Yeah.

Dale Shafer: So, or grass grow, because once it’s grown, yeah, whatever. Yeah. So I kind of, I kind of believe that, like You know, because most of, most of what I’m talking about with clients, like 85% of our conversations throughout the year are going to be on things that are over here in their lives and not connected to the rate of return of their portfolio. So if we can build something that is not set it and forget it, but set it and let it do what it’s supposed to do and manage it along the way and do some tactical rebalancing if need be and things like that, That’s really the goal. The goal is to win the game over the long run, not in the short run.

Josh Hile: Yeah, yeah, no, definitely. And there’s some, you know, there is this thought process I’ve seen from some wealth managers that it’s like, okay, building the client portfolio based on their specific needs, like essentially cash flow needs or other needs of that nature. Um, how do you, um, how does that influence how you’re thinking about it? Like whether they’re like 50 years old versus 70 years old versus 30 years old, how are, how are those kind of influences changing the portfolio for your clients?

Dale Shafer: Yeah, I think the, you know, the old maxim, uh, that’s, uh, you know, the younger you are, the more you can afford to take risks. And so, you know, younger clients are definitely, uh, I would say most. I do have some younger clients who were quite risk-averse, which is always interesting to me. So, I have to do a lot of coaching and to get them to see that if you’re too conservative too early on, you just— it doesn’t turn out well long term. So, obviously, younger people can afford to take a little more risks. And so, we do. A lot of people, if they have big expenditures coming up, we’re working on a cash plan for how to provide for that. Retired clients. I only have a handful of retired clients. Most of my people are still working. And so even for those retired clients in these markets, it doesn’t make sense to be that conservative because there’s no gain there. It’s just not producing the income. It’s not producing the steady returns that a 40% bond market portfolio used to do. And so we’re making—

Josh Hile: some retired clients, you’re looking for future wealth for their, like, especially if they’re liquidity is fine. You’re looking for wealth generation for their kids or whoever’s the heir.

Dale Shafer: Yeah, yeah, yeah. And then, you know, even if they are in some sort of periodic distribution cycle, um, we— I really want the market to pay for as much of that distribution. Um, and so if we can keep a steady line on the portfolio, still produce a rate of return, still provide for the income that they need, we’re, we’re winning, right? And that’s, that’s the goal.

Josh Hile: From— and maybe this, this goes a little bit to your exit planning, but like in general, like, uh, concentrated positions within the client portfolio, whether it’s stock or they own a business, like how do you build around that and make sure that they’re kind of like also being diversified and reducing that without taking as much of a tax hit? I know it’s difficult.

Dale Shafer: So yeah, yeah, I mean the biggest concentrated wealth for business owners is their business and it makes up a significant portion of their total net worth. And so when often this happens a lot, especially in smaller businesses, the owner has in many cases just plowed money right back into the business. They own their home or they’re paying a mortgage on it or something like that. Maybe they have a second home. I find that a lot of them spend money, right? So they— their business generates income and it’s not necessarily building wealth because it’s hard to do both of those things at the same time.

Josh Hile: Yeah.

Dale Shafer: And so they’re, they’re generating the income and enjoying the income. And then they get, you know, closer to wanting to be done. And then they realize that the business on paper may not look as healthy as they feel it is because of the income that they’ve been able to pull. Yeah. So that concentration, one of the early conversations is where, you know, what does the full landscape look like? Where, where is all of the wealth, the properties, the bank accounts? Where does everything live? What’s invested, what’s saved, all of that. And then we simply start to diversify some of that income away from the business and into some sort of other savings. Maybe it— for them, maybe it isn’t to a piece of real estate, maybe it’s into some— if they have a, you know, some sort of gain event, maybe it’s going into some way to defer that gain, you know, an Opportunity Zone fund or some other, you know, piece of real estate, something like that. We’re gonna, we’re gonna build wealth where it’s best for them, and, and that’s how we start to diversify. Very, very few people think about their businesses as being a concentrated piece of wealth, but almost none of them would put as much wealth as they have in their business into any one stock ever. None of them. They would all say that’s stupid and super risky, but what they haven’t realized is that they’ve taken all the risk in this one asset here And statistically, that gets even more risky when you come out to the fact that roughly 70% of the businesses that are taken to market don’t sell. And if they do, it might take 5 or 6 times to get that business sold, and usually it’s for a much lower multiple in value than what they’d hoped for. So it’s very important to, to not only diversify away from that, but also to prepare that asset so that it can be properly, uh, transferred or, um, you know, reach some other kind of disposition where we can pull, you know, the money and use it and do the things over here or that. And, um, it’s, it’s just, it’s probably, I think that’s one of the most important ahas that, that I help some of these business owners reach, is that they’re sitting on what they think is a big pile of money that may not be able to be sold. And so we’ve got to get it ready.

Josh Hile: And I guess for clients, where do you, where do private markets fit in, in their portfolio? And how do you think about that for them? And what are the kind of conversations around sizing and liquidity needs?

Dale Shafer: And yeah, I mean, private markets, basically I, I look at that as that’s money that can build wealth on the side that is illiquid. Yep, it’s money that they don’t need, right? Because anybody— and, and I often go back and forth in my brain about the accredited investor requirement because sometimes I think that I have clients who are not accredited investors that are savvy enough to know what they’re buying and would benefit from some of those other investment opportunities, but they’re just locked out. Yeah, however, the benefit of the accredited investor status is that you’re likely investing money that you don’t need and doesn’t need to be liquid. And so I think, um, you know, when we have a situation where clients have too much cash that’s sitting aside, they have enough, enough into the markets, right, as a percentage of their net worth, they have enough in real estate. If we start to really diversify the total net worth picture, not just the investment picture, but the total net worth picture, there’s a lot of opportunities in private markets, um, if you’re selecting them the correct way. And I know that this is the time that we’re recording this, private markets are big, big, big focus for a lot of people and conversation and things like that. But, um, but I think that there’s a lot of opportunity with good managers and good companies, um, to make good investments for clients.

Josh Hile: Yeah, yeah. And what, what do you see usually is the pushback or even the, like, the pull of private markets with clients? Like, is there, like, do you see, like, your clients asking about it? Do you see them being like, hey, what’s like worried about the liquidity needs they might need, or what, what’s the usual issues when you’re having those conversations?

Dale Shafer: I think that conversation’s evolved. A couple years ago, I was hearing more questions about it, uh, and I think that’s just because of where we were economically after stimulus. Yeah. Um, now I think it’s more of a— it feels more push than pull, um, for me pushing them and saying— and what I mean by pushing, uh, is not like being, you know, annoying, but it’s just like, hey, this is an opportunity that we should look at. You know, you’re having a liquidity event from the business. I, I had, um, last fall I had a client who had a large distribution that needed to be taken from the business, and that went into a fund, actually a Citizen Mint fund. And so that’s, um, that, that benefited him because he did not know about that opportunity. He didn’t understand it. He didn’t realize that there were some tax benefits associated. And so once we have the conversation, provide the education, give them a couple of options, it can make a lot of sense. And I think that there’s just— there’s a— that’s maybe a bit of the education gap between the advisory community and the, you know, the standard investing public. But I think it’s an important conversation to have in the right situations because really not— and I know that there are some advisors who would probably disagree with this unless there’s a way for them to be compensated for it. But yeah, sometimes there are better things to do and better things to recommend than just more money into the capital markets, more money into, you know, whatever, you know, privately traded REIT your firm offers or something like that. There really, really is— there’s a wide universe, and I think it’s our jobs as advisors, and especially those of us who bear the fiduciary standard responsibility, to know what those opportunities are and help clients connect to them.

Josh Hile: Yeah, exactly. All right, I 100% agree. Um, I guess what should advisors rethink in how they approach kind of client portfolios today? Is there anything that you would say like most advisors should be doing?

Dale Shafer: Yeah, I mean, I would, I would say, you know, historically this is a sales job. And I think that the, the industry has changed enough, the client behavior around advice has changed enough. I think that there’s been some really great people in the advice community, um, like Michael Kitces and Carl Richards and these other people who have just done a great job changing the perception of what it is that we’re supposed to do for people and with people. And I think more advisors really should think of this, um, and I know it’s hard because a lot of firms you start off and you just got to sell your way into you know, being able to stay alive and stay at the firm and not get fired and things like that because of production and whatnot. But if we can focus on who are the clients that we’re serving, not be afraid to carve in a niche— that’s very scary because then you limit your pool of prospects, right? But if you can understand who it is that you’re wired to serve, why you want to serve them, and do everything you can to learn as much as possible about what that type of client needs and how to, uh, to get the advice that they’re looking for and, and how to connect with them, I think we’re going to have a much better thing. I see the industry moving more that direction where people want a cross between like financial planning and life planning at the same time. Um, and so, you know, that’s becoming a really interesting shift. But I don’t know, maybe one day we’re all just like family offices. I really don’t know how that’s going to look, but it’s, it’s going to look something along those lines. I think.

Josh Hile: And, and maybe on that topic, where do you think wealth management in general is heading, and how do you see AI changing how people take advice?

Dale Shafer: Yeah, I mean, look, it’s totally— at this point, it has been democratized for a long time. Um, you know, 10 years ago I was hearing that robo-advisors were going to kill the advisor, right, the, the personal advisor. Now we’re hearing that AI is going to kill the personal advisor, and I think AI, uh, people are searching AI for financial planning advice and they’re getting something, right? It’s kind of like Google. Google was going to end all advice ever, right? So AI has given them something. I think the human advisor is always going to have a role. And now instead of being, you know, the, the end-all know-all in the conversation, our job is to help clients disseminate the information they’re receiving and, and then work with it, not work against it, because they got it from some machine learning, right? So there’s, there’s a lot there. We still have a role. We still have the human— I mean, until these things become totally sentient, right? I don’t know what that, what that’s going to look like. We’ve seen all the Hollywood movies about what happens, right? But, uh, but I think that there’s still the brain, the emotion, the, the attachment, the empathy, right? All of these things matter in that relationship. And so So again, taking the information that clients are receiving, helping them think through it, and then helping them make a good decision around it. I think that’s the role of the advisor even in the AI age.

Josh Hile: And what do you think is the biggest opportunity either for wealth management or for you personally over the next 3 to 5 years?

Dale Shafer: You know, we’ve been talking about this great wealth transfer for 20 years, right? Yeah. And I think that’s just going to kind of continue to go along, but the average age of the advisor also is is getting older. And so I think there’s going to be a lot of opportunity for people myself— I’m in my mid-40s— there’s a lot of younger advisors coming in to the industry, which is fantastic. And I think there’s going to be a lot of opportunity to build teams that serve people at a very high level. And it’s going to shift the advice delivery model, it’s going to shift the investment landscape quite a bit. You know, right now a lot of these things are, are supported— ETFs and otherwise— because mutual funds because of the mass amounts that’s sitting in 401s and company-sponsored plans and institutional funds and things like that. And I think that’s going to continue to kind of shift a little bit as some of these people retire out and go into distribution phase. And so I think the markets are going to continue to be more evolving and more complex, and, uh, there’s a lot of opportunity there for people who want to think through that and actually serve people and not just be a salesperson.

Josh Hile: Yeah, no, definitely. Okay, so to end it here, and here’s a little bit of off-the-wall question, but what’s one thing that people don’t know about you or a hobby that you love?

Dale Shafer: Well, I, I, um, I don’t know, I’m not a terribly private person, so I think my clients know a lot about me, uh, and in the public, um I would say maybe like the quietest thing that I, that I do or have is a couple of years ago, I, um, through my Rotary Club was touring a Boys and Girls Club, and they said that their gym floor hadn’t been refinished in like 20-something years. And anybody who’s ever bounced a basketball knows that that’s not good. Yeah. And, um, so we put together a, uh, a basketball game to raise money for that gym floor replacement, and we did, and Um, 2 years ago that turned into its own nonprofit that now I run just to play that basketball game. And, uh, all the money the basketball game raises here in Scottsdale goes into youth programs. And, uh, this year we were able to give some money to an after-school program for, uh, soccer equipment, which was a lot of fun. It’s a free program. Yeah, community in Scottsdale where there’s, uh, some, some underprivileged and under-resourced families. And so those kids now have a place where they can go safely kick a soccer ball with a jersey and, you know, nice nets and things like that. And it’s pretty cool. So I would say a lot of people know I’m involved with that, but maybe some people don’t know that it’s like my weird patio brainchild that started it.

Josh Hile: And so that’s amazing. I mean, that’s an incredible mission, and that’s really cool that you were able to do that. And I’m sure it’s just like in any affluent area, you have like issues where people, it’s hard for them to afford what the rest of the population can afford.

Dale Shafer: So yeah, yeah, it’s been, it’s been a lot of fun, man. We get, uh, we get a group of adults together. There’s about 20, 25, you know, firefighters, cops, industry leaders, nonprofit leaders, government leaders in the city, and we all get together and try not to get injured and play a really fun basketball game and raise a little bit of money, and it goes back to the kids. So it’s, it’s a lot of fun.

Josh Hile: That’s awesome. Well, thank you so much, Dale, for your time and really appreciate all the discussion. And I know you’re doing well by your clients and, um, yeah, just thank you so much again.

Dale Shafer: Yeah. Thank you, Josh. Appreciate it.