Ryan Nauman interviews Shang Chou, co-founder and managing partner at Dishmi Capital, about how portfolio construction is evolving beyond traditional 60/40 and mean-variance optimization toward maximizing after-tax wealth. Shang shares his Wall Street background (PIMCO, J.P. Morgan, Goldman Sachs), work at Simplify Asset Management, and the personal liquidity-event experience that motivated Dishmi’s focus on helping taxable investors with concentrated stock and major life events. He argues advisors leave “structural alpha” untapped by optimizing for pre-tax returns and outlines a three-dimensional framework—time, the full balance sheet (including proactive, tax-aware borrowing), and an expanded solution set—highlighting tools like tax-aware long-short, exchange funds, variable prepaid forwards, collars, SPX box spreads, and Section 351 exchanges. He predicts tax-aware portfolio construction will become table stakes and expects continued growth in the independent advisory channel.

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00:00 Why Tax Alpha Matters

01:10 Meet Shang Chou

02:44 Founding Dishmi Capital

05:17 Planning Before Liquidity

06:28 PIMCO Structural Alpha

08:55 After Tax Mindset Shift

12:27 Three Dimensional Framework

15:33 Borrowing Smarter for Homes

17:41 Institutional Tools for Advisors

20:32 Biggest Untapped Tax Wins

23:13 Which Strategies Go Mainstream

25:56 Life Events Drive Planning

28:28 Future of Tax Aware Advice

31:38 Where to Find Sheng

32:12 Closing and Subscribe

Shang Approval first video1827908984:

Hello, everyone portfolio construction has

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evolved over the years as more pressure

has been put on the 60/40 portfolio, and

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innovation has brought more sophisticated

investment strategies to retail

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investors, while a bigger emphasis has

been placed on limiting tax obligations.

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Well, I have on an industry expert

who's gonna share his thoughts a- and

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a very interesting take on portfolio

construction and generating tax alpha.

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All right.

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Let's go ahead and get started.

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I have already talked enough, and let's go

ahead and bring on the star of the show.

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I'd like to give a very

warm welcome to Sheng Cao.

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Sheng is a co-founder and managing

partner at Dishmi Capital.

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Sheng, thank you so much

for coming on the show.

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It's an honor to have you.

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I'm really excited

about this conversation.

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As you know, limiting taxes, generating

tax alpha is very important today.

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So, um, can you go ahead and

please tell us a little bit more

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about yourself and Dishmi Capital?

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Absolutely.

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And first of all, Ryan, thank

you so much for having me.

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I'm really excited for our conversation.

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Uh, just a quick background on myself.

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Um, you know, I've worked on Wall

Street for 20-plus years, with the

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bulk of my time spent actually on the

institutional asset management side.

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I would say my formative years

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uh, on the fixed income side.

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I've also spent time at J.P.

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Morgan and Goldman Sachs.

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Uh, always had a bit of an entrepreneurial

bent myself, and so, uh, during COVID,

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when we were all working from home,

I joined a group of PIMCO colleagues

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and helped build an asset management

firm called Simplify Asset Management.

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We were the some of the first in the

ETF industry to put over-the-counter and

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listed derivatives into the ETF wrapper.

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Also worked on things like

Section 351 exchanges, which

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we can get into more later.

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Uh, but what I was seeing was that

there was this democratization of some

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really complex, sophisticated products

that can really help move the needle.

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So about a year ago, I launched

my firm, Dishmi Capital.

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Uh, quite simply, we're an

SEC-registered investment advisory firm.

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Uh, and what we specialize and do for

folks is we try to think, uh, very

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thoughtfully about things like tax alpha,

alternative investing, uh, because we

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see there's so many really great tools

and solutions out there that can really

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move the needle for taxable investors.

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Yeah, that's fantastic, Sheng.

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I love your experience.

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You started at PIMCO.

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I know the team over

at Simplify very well.

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Great team.

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You've started a great thing there.

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Love it.

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So let's, um, focus on Dishme.

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Why did you start Dishme Capital?

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What was it?

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You just thought- Yeah … "You know what?

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Let's, let's go on my own here

and- Yeah … do my own thing."

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Or, or what was the

thinking behind starting it?

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Yeah.

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You know, and it comes down to a

very, like, personal and visceral

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experience I had with my own family.

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Um, when I was, you know, getting my MBA

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2014, my fiance, who's now my wife,

um, was in biotech, and she had joined

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this fledgling startup in Santa Monica,

which ended up going public and then

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getting acquired by Gilead for, like,

billi- billions and billions of dollars.

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And I'll never forget the morning we

woke up where we were these two young

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kids with, you know, tons of grad

school debt, you know, didn't have two

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nickels to rub together, and overnight

we became, I guess, what you would

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call a high net worth individual.

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Uh, along that path, you know, I

always say I- we made so many mistakes

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because we really didn't know what

we were doing, and we didn't go and

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seek the advice of, you know, someone

who could help us navigate this.

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Um, at the time, you know, we

were just thrilled and delighted.

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You know, we were…

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I remember it was almost euphoric when we

got the news that the company was bought.

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But what we didn't realize was we had

actually just signed on to get on for the

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rollercoaster ride of our lives, right?

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Because when you have a big portion

of your net worth in a single stock,

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you get on the ups and the downs, and

you can see some really big swings.

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And so that experience really taught

me a lot, and I spent the next 10-plus

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years of my life really building

some products that can help, you

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know, things like exchange funds.

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I also use tools like

variable prepaid forwards.

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Uh, in recent years, we've seen the

rise of things like tax wear long-short.

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So this whole solution set, you

know, has been brought to market by

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all these asset management firms.

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And now as advisors on the independent

side, right, we have this really cool

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opportunity to work with this whole

solution set and really help tax law

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advisors navigate these types of events.

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Sheng, I love that.

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I love that you, you know, started

based on your, you know, personal

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experiences, your- and your wife's.

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That's fantastic.

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And I feel as if what you went through

then, you and your wife, and, you know,

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have all this exposure in one stock.

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You know, you, you had a

liquidity event worked out well.

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I feel like more and more people are

experiencing that now with these AI

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startups and these tech startups.

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Now all of a sudden they sell, they

merge, they have this liquidity

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event, and now all of a sudden they're

in flux with all this money that

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maybe they didn't have yesterday.

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So I have a feeling your experience works

very well with what's going on today.

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A- absolutely.

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And, you know, the, the one lesson that I

really picked up was it's never too early

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to start planning and thinking ahead.

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Um, for us, you know, in like 2015,

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young kids living in an apartment.

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Um, you know, we had aspirations

and we had goals, right?

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This was what our life was about, and

we wanted to get married, we wanted

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to buy a home and start a family.

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And in hindsight, had we planned

more proactively, we co- could have

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probably achieved a lot of those

goals and objectives in a way that

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was potentially more tax efficient.

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You know, uh, we wouldn't have gotten

surprised with the massive tax bill

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when we went to see our CPA at,

you know, the start of the year.

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Um, and so, you know, that extra ounce

of planning, it doesn't take a lot of

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effort or time, but it can go a really

long way in helping, you know, change

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the outcomes of these situations.

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Yeah.

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That's fantastic.

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And you brought up, you know, taxes.

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I'm sure, you know, when you get

that liquidity event, let's say you

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sell a business or, you know, you

capitalize on a, you know, being part

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of a business that was sold- Tax is

our big impact on, on that liquidity

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event and, and bringing money.

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And you mentioned during your time at

PIMCO, you've compared, um, today's

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taxable wealth management industry and

the fixed income industry before Bill

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Gross really transformed it at PIMCO.

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You state that advisors are leaving

structural alpha on the table.

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What similarities do you see, and why is

now the right time to rethink portfolio

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construction for that taxable investor?

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Yeah.

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Yeah, absolutely, Ryan.

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And, you know, just to share with, you

know, your viewers, you know, it's-- I,

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I drew the comparison to, you know, PIMCO

in the '70s where at the time bonds were a

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very sleepy part of, you know, the market.

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People would just buy and clip

coupons and hold them to maturity.

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Then along came, uh, you know, these,

the scrappy group of folks who said,

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"Hey, why don't we actively manage this?

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We can trade them.

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We can try to buy them for a

certain price, sell them for more.

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We can roll down the yield curve."

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And then as the derivatives market

started evolving, they started

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using things like options and very,

very early on things like swaps.

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And this was able to create sort

of the structural advantage in how

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they built and created portfolios.

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Uh, you know, I worked there from

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2014, so just under four years.

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But when I was there, I remember,

you know, we had an equity suite,

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you know, at the time, uh, at PIMCO.

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And what they were doing was effectively

using derivatives to replicate some

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sort of beta or broad S&P 500 exposure.

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But when you use derivatives, they

can be very capital efficient.

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And so let's say for every $10 of

exposure in the S&P 500, you might

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only need to outlay two or $3, and that

remaining seven or $8 can be actively

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managed and to buy things like, you know,

investment grade corporate bonds or, you

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know, agency debt or something that can

outperform sort of the cost of financing.

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And you end up with a exposure that

looks and feels very much like the

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S&P 500, but is structurally set up

to outperform it just by a little bit.

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And so that concept always stuck with

me, and we see a lot of parallels to

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that today in sort of the tax-ware

investing world for individuals.

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Yeah, it's interesting because now

within just ETF wrappers, all the

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derivatives that are now being used

in the ETF wrapper, they've become

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very popular, whether it's using

to generate, uh, or enhance income

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or eliminating drawdown, uh, risk.

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So it's interesting that, you know, PIMCO

was doing it, you know, 10 years ago.

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That's fantastic.

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Absolutely, yeah.

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So you suggest that many advisors

still optimize portfol- portfolios

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primarily for, uh, pre-tax returns

using traditional risk allocation or

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asset allocation models, whether it's

60/40 or just a, you know, efficient

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frontier mean-variance optimization.

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How should financial advisors

begin shifting their mindset toward

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maximizing after-tax wealth instead of

simply maximizing investment returns

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via a 60/40 portfolio framework?

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Yeah.

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Yeah, absolutely, Ryan.

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And I think first and foremost, you

know, I would say, you know, I think

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you and I and most of your viewers,

in fact, all of your viewers, you

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know, we all eat after-tax returns.

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Like, the things we pay our mortgages

with, you know, our kids' tuition,

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like our food on the table, those

are after-tax dollars that we spend.

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So it's very important to think

through both the pre-tax as

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well as the after-tax lens.

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And, you know, historically in the

industry, at least from everything I've

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seen, the general portfolio construction

process might look something like this.

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You know, you'll sit down with

your advisor, have a conversation

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about your goals, your

objectives, your risk tolerance.

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Some of that data might get plugged

into some financial planning software.

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Uh, they'll share a Monte Carlo

simulation to make it look really fancy.

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Maybe they'll share a probability

number of you achieving your goals.

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And they also take your starting portfolio

today, and usually they show you a

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new portfolio which will increase the

chance of you hitting your goals, right?

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And so when you think about that, it's

a very static process that sort of just

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assumes, like, this moment in time, this

portfolio I'm gonna show you is gonna

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be the right thing for us to do for the

next, you know, three to five years.

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Plus, we may maybe make some

tactical adjustments along the way.

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And currently, all of the inputs that

got baked into this whole process,

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right, the capital market assumptions,

those mean-variance optimization things

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we did, uh, those are all based on,

you know, like pre-tax returns and,

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you know, correlations that were sort

of based on historical precedents.

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So there's a lot of

assumptions baked into this.

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And what I'm saying is that I think,

you know, that's a good process.

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It's works reasonably

well for most people.

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But when you think reasonably well,

it also leaves a lot on the table.

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And so maybe a different way to think

about it is to think rather than go

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through this static process, we should

think dynamically over a period of

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time because our tax realization, our

tax profiles are gonna evolve, right?

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We should think through

holistically both the asset side

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as well as the liability side.

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You know, like, much like a pension plan

might do liability-driven investing, let's

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think about both sides of that, right?

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And then let's bring some of these

new solutions that we've kind

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of, you know, have come to market

and are accessible to most of us.

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Maybe there's ways we can help, you know,

augment some of those return profiles.

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So there's a lot of different ways

to slice and dice this, but I'm

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saying I think we can maybe evolve

from beyond that traditional planning

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process into something different.

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Yeah, Sheng, I think that's fantastic.

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You know, at Zephyr and,

you know, we focus…

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I've done a lot of research.

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I'm a big advocate of mean-variance

optimization, the efficient front,

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and just, um, modern portfolio theory.

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However, things have changed, just

like the nine-style equity box.

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Maybe it's time to move past that.

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Um, things are evolving.

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You know, that worked really

good when it was just basic US

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equities, foreign equities, fixed

income, and create a portfolio.

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But now things have changed,

so now I think it's a very good

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point that maybe you broaden the

horizon in terms of building that

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portfolio, portfolio construction.

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And you've come up, you've mentioned

it just briefly there, come up with

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a three-dimensional framework, which

includes time, the balance sheet,

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and an investment solution set.

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Can you maybe talk more and walk through

each, uh, each dimension, explain

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why considering all three together

can create better client outcomes?

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Yeah, absolutely.

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Um, you know, I would say

first, for time, you know, the

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reality is we are individuals

that have finite time horizons.

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A lot of the previous portfolio

construction processes maybe were

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borrowed from the institutional

world, like the endowment model.

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You know, endowments have

infinite horizons, right?

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They don't fear emo- they

don't feel emotions the way

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we do, like fear and greed.

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Uh, and so we should maybe tailor the

way we invest, you know, from there.

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Uh, and concurrently, right, if you can

imagine if you're an individual navigating

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an upcoming sale of a business, you might

have a concentrated single stock position,

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or just maybe a very complex, varying,

you know, tax, um, picture, you know,

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over the next few years of your life.

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You wanna be thoughtful around that.

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You wanna plan for that, right?

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Something you do this year might look

a little bit different the next year.

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And importantly, by doing those

different things, you can really move

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the needle and add significant value.

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Um, along the lines of the asset and

liability side, you know, it, it just

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seems so obvious where, like, you know, we

are individuals, much like corporations,

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that have assets and, and liabilities

on both sides of the balance sheet.

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But the reality is the industry

is so silent on the, on

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only the asset side, right?

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And even within the asset side, you

carve out these sub-asset classes and,

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you know, no one's really thinking

about how should we borrow efficiently.

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Everyone's sort of borrowing

just in time, right?

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If I wanna buy a house, oh,

shoot, I should call the bank

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and try to figure out a mortgage.

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You know, if I'm gonna buy some, buy a

car, you know, I should get a car loan.

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But no one's really thinking, "Well,

let's proactively, structurally set up

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our balance sheet so that we have the

flexibility to borrow at the lowest

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cost possible, and have that flexibility

on hand for whenever we need it."

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So that's the way that

we think about borrowing.

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Uh, and then lastly, the solution set.

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You know, like, it's been really

incredible the last few years.

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You know, as I mentioned, things like

tax-aware long-short, tax-aware trader

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hedge funds, the variable prepaid

forwards, flex color options, SPX box

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spreads, you know, exchange funds.

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These are now accessible to individual

investors through advisors, you know.

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And so they've become so much more

accessible from even just five years ago.

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So the toolkit has really,

really greatly expanded.

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Mm-hmm.

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I agree.

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That, uh, the solution set, like

you said, is expand- Every day

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we're getting new exotic ETFs, which

depending on where you sit, might

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be a little bit too exotic for some.

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But again, it helps, you know,

potentially build better investment,

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uh, portfolios for clients to help

them achieve their goals- Yeah … if

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they're used the right way.

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I love your take on the balance

sheet and just borrowing.

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Like you said, n- I'd say 99% of us,

we just say, "All right, buy a car.

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We gotta go to the big banks and, and

get a car loan or a mortgage," and

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there's not very many other options.

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So I'm glad you brought that up.

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And is, is there a place where clients

can maybe, or- You know, borrowers can

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get more information- Yeah … about

doing different things there?

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Yeah.

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You know, and, and I had this

conversation actually very

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recently, um, with an individual

who's looking to buy a new home.

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And I think traditionally the

order of operations might be to

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borrow first, then buy, right?

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You go to your bank, apply for a

mortgage, go through underwriting, and

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then you can go acquire the house with

a down payment and with the mortgage.

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What that ends up happening is, if

you do it that way, you are capped at

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up to 750,000 of, of, uh, deductible

interest on that mortgage debt.

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And so, you know, you can actually

change the order of operations by

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buying first and then borrowing.

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And if you do it that way,

you end up actually…

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you can actually override

that $750,000 cap.

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And one of the potential paths we

discussed was, well, if you happen

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to have a brokerage account with a

portfolio on there, let's take a look

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at that, and maybe there's ways we

can de-risk that, you know, portfolio.

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If it's, say, in equities or single

stock, maybe we can collar the

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position so that it's, we know worst

case this is gonna be the floor.

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But once the floor is established, we

can do something like trade an SPX box

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spread, which can allow you to borrow at

pretty much near or at risk-free rates.

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And it's also a very tax efficient

way to borrow because you can

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deduct the cost of borrowing.

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And then you take that, those

proceeds and you buy the house.

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Once you've bought the house,

you can do a cash out refinance

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through your bank, right?

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And then those proceeds are, are

deductible and limited against, uh,

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you know, things like investment,

uh, interest from investing.

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And so there's just, you know,

creative ways to think about the

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order of operations and, you know,

in conjunction with your bank, with

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your advisor, your tax advisor.

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Uh, you know, I think there's just

ways to unlock some value for clients

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that are looking to, to undergo these

major transactions in their life.

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Yeah.

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That's fantastic.

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And like you said, Shane, e-

for a lot of people they're, you

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know, they don't think of that way

of, you know, tax alpha, right?

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So lot of good options out there.

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You know, reach out to somebody like

yourself who can, you know, help financial

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advisors with those different ideas.

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And you've talked about institutional

investors, you know, investing like an

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institution in a hedge fund approach.

331

Their approach to portfolio construction

is different than most wealth managers.

332

What are the biggest lessons advisors

can borrow from institutional

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portfolio management without making

portfolios overly complicated?

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Yeah.

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And I think that's one of the

exciting things you, you touched

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on earlier too, Ryan, which is this

proliferation of, you know, ETFs.

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And, you know, I think at

this point there's more ETFs

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than there are single stocks.

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Uh, but along the way, you know, there's

been some really interesting products that

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have democratized what's been traditional

and institutional investment strategies.

341

Portable alpha, return stacking, you know,

derivatives, hedging, liquid alternatives.

342

And now, you know, advisors and

individual investors can potentially

343

use these tools to really create better,

more robust and optimal portfolios.

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Um, I'll give you one really simple

low-hanging fruit example, which

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is, you know, historically, we've

sort of depended on stocks and bonds

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to be diversifying to each other.

347

You know, bonds are supposed to dampen

the volatility, but you might have

348

a time like in 2022 when the Fed

commenced, you know, the rate hiking

349

cycle, and bonds sold off that year,

equity sold off as well, where that sixty

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forty, you know, suddenly broke down.

351

You know, something like managed

futures or trend following, you know,

352

historically these exposures have

provided really great amounts of things,

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what we call crisis alpha, right?

354

These are low to kind of, you know,

low teens to high single digits,

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absolute returns that are uncorrelated

with both stocks and bonds.

356

So you can imagine in a scenario like

twenty twenty two, obviously, with

357

the caveat that past performance is

not indicative of future performance.

358

But, you know, it's delivered

sort of a diversification effect,

359

and that's made for better, more

robust portfolios for investors.

360

So tools like that are now at

pretty much everyone's fingertips,

361

and it's an exciting time.

362

Yeah, and at the f- at the, you

know, kind of outside looking

363

in, they sound complicated.

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They might sound like, "You know what?

365

How am I gonna explain this to a client?"

366

But there's a lot of education out

there now, whether it's on a podcast or

367

blogs about this, and, and help, like

Dishme, that, you know, can help advisors

368

understand these strategies where…

369

And if they're in a ETF wrapper,

they're much easier to implement

370

than, say, doing a collared

spread or all these o- different-

371

Yeah … option strategies on your own.

372

So I love that there's all this

democratization in investing.

373

But again, financial advisors,

I say this a lot, make sure you

374

know what you're getting into.

375

Do the research on these strategies

so you can, um, help your

376

clients and position them better.

377

Absolutely.

378

You know, many advisors, they focus

on generating investment alpha.

379

You know, we here at, you know, Zephyr,

we talk a lot about generating alpha.

380

It's very important.

381

But you make the compelling case

that tax alpha can compound into

382

significant lifetime wealth.

383

In your experience, where are advisors

leaving the greatest tax opportunities

384

untapped, and what changes could have

the biggest impact for affluent clients?

385

Yeah, absolutely.

386

And, you know, uh, just in terms

of alpha, you know, it's incredibly

387

ephemeral, difficult to capture, you

know, and there are some very, very

388

smart people, people much smarter

than me, who are trying to seek that

389

out in the form of, you know, hedge

funds, venture capital, private equity.

390

Where I think as an advisor I can

truly add value is by doing very

391

rigorous, thoughtful diligence

on these said manner, right?

392

In terms of investment alpha, pre-tax

alpha, um, I, I don't think I'm the

393

right person to go pick stocks and

think that they're gonna outperform

394

the S&P or something like that.

395

But we, we know a number of managers

that are very thoughtful and

396

have a track record of doing so.

397

So that's on the investment alpha side.

398

I think my role is more

diligence, research, right?

399

Staying up to trends, uh, of what's

going on in the industry and getting

400

access, importantly, for our clients.

401

I think as advisors, though, the

tax office side is something that

402

we can really add a ton of value on.

403

A lot of that lies, frankly,

in just the structuring of both

404

the asset side and the liability

side of a client's balance sheet.

405

You know, when I think of a client's,

you know, assets that they hold,

406

there's sort of two roles, right?

407

There's the investment role

it has to fulfill, right?

408

Think maybe you have some core

US equities, you know, that's

409

your growth bucket, that's

gonna keep up with inflation.

410

Uh, you know, long term, you know,

over 10, 20 years, it should, you know,

411

grow into something very meaningful.

412

But there's also a tax side of it, right?

413

And so is there a way that maybe we

can restructure those core US equity

414

exposures in a way that's gonna help you

produce better after-tax results, right?

415

And so that's where I think advisors

can really step in using some of

416

those tools we mentioned earlier,

and really help reshape the client's

417

assets and liabilities, right?

418

And align it in a way that

matches their overall tax profile.

419

Mm-hmm.

420

Yeah.

421

Going back to the investment alpha,

generating alpha now is so difficult

422

with markets as efficient as ever.

423

Then you have, you know, such high

concentration in those 10 names, big tech,

424

makes it very difficult to generate alpha.

425

So like you said, there's a lot of

other ways to generate alpha that

426

doesn't involve the investment

part, which is very difficult.

427

So very good points.

428

You discussed strategies and p-

earlier, like, you know, we have the

429

long-short overlays, we have exchange

fund, y- this Section 351 exchanges,

430

which are becoming very popular

now, variable prepaid forwards, and

431

other sophisticated planning tools.

432

Which of these do you believe are becoming

mainstream for advisors working with high

433

net worth clients, and which maybe remain

underutilized despite their potential?

434

I would say, Ryan, I think all of

them except one that you mentioned

435

are starting to go very mainstream.

436

And, you know, we talked to a number of

folks, um, earlier this, uh, year in May.

437

My friend Brent Sullivan, you know, he

had his inaugural event BASIS Northwest.

438

We congregated about 300-plus investors,

advisors, allocators, and asset

439

managers, and it was really exciting

to hear the buzz around this stuff.

440

Like, everyone was thinking about

after-tax as well as pre-tax returns.

441

Everyone was very familiar

with the toolkits.

442

Uh, the asset managers that were there

were continuing to innovate and, you

443

know, evolve in this, uh, solution set.

444

So it's a really exciting time there.

445

I did think, though, that the one area,

the one, you know, kind of solution that

446

has not gotten as much traction, which has

surprised me, is the Section 351 exchange.

447

Um, you know, I saw this stuff

448

was working on an ETF company.

449

Uh, but at this point, you know,

we're hearing that there's a lot

450

of interest kind of building up,

but there's also a knowledge gap.

451

I think one from the advisor side, and

two from the individual investor side.

452

You know, there's times maybe it sounds

very complicated and perhaps very

453

difficult operationally to pull off.

454

Uh, but a number of firms have

made this very accessible.

455

And then for the right person,

like it could be a really, really

456

great sort of tax efficient way to

offload some of these concentrated,

457

you know, highly appreciated stock

positions you mentioned earlier, Ryan.

458

Like, the top 10 names in the

S- have grown tremendously.

459

You can take that, diversify it

into something broader, like an

460

S&P 500 exposure, uh, in a very

tax-deferred, efficient manner.

461

Yeah, you're exactly right.

462

I've had some conversations

on the 351 exchanges.

463

I do think that, like you said, the

knowledge gap there, it might sound more

464

confusing than what it is, the paperwork.

465

And again, it goes back to

your personal experience.

466

You know what?

467

You might liquidate a big holding

in, like, a tech company all of

468

a sudden, or you give one share.

469

You're working for NVIDIA, and you've

got this huge holding in NVIDIA.

470

It's run up.

471

Now, what do you do with it?

472

You know, you don't want this

huge tax obligation, so great,

473

uh, great opportunities there.

474

One point that I believe is very

interesting that you have mentioned

475

is that client portfolios should

evolve around life events, like,

476

uh, business sales, IPOs, equity

compensation, retirement, you name it.

477

Normally, you know, I've done

a lot of research on this about

478

rebalancing and what's the best

rebalancing year, quarterly, monthly.

479

Typically, I say

rebalance on a year basis.

480

But you're saying do it

more around life events.

481

How can advisors create a more

dynamic planning process that

482

proactively captures tax opportunities

before these events occur?

483

Yeah, absolutely.

484

And you know, I, I, I believe so

strongly that, you know, these key

485

life events, inflection points are

where advisors can really move the

486

needle and add tremendous value.

487

Um, not just from, like, a pure

quantitative perspective of, like,

488

after-tax returns, but also, you know,

from just support, empathy, like, you

489

know, having prior experiences helping

other clients navigate it, assuring

490

the folks that are going through this.

491

Um, you know, valuable both

from a quantifiable as well

492

as qualitative perspective.

493

Um, but yeah.

494

And exactly.

495

You know, whether it's, you know,

something as simple as, "Hey, we wanna

496

get married," "We wanna start a family,"

"We wanna buy a house," or, "I'm selling

497

my company," or, "My company just went

public," you know, or, "I wanna sell

498

this other asset on my balance sheet,"

or something like that, um, these

499

are major moments in people's lives.

500

And for advisors to be able to step in

with not just great advice and empathy

501

and, you know, assurance that they're

gonna help navigate this process, but

502

also bring these tools to the client,

show them how we can thoughtfully combine

503

them to best align with their goals,

their objectives, their needs, right?

504

That's so valuable.

505

And so, you know, when I think of

when we thought about how we were

506

gonna launch our firm, you know,

of course, a couple of years ago,

507

we started laying the groundwork.

508

It was…

509

You know, we wanna be able to

offer a solution that is helping

510

quantifiably add value and remove

friction from a client's life.

511

You know, I could go out there and

give general planning advice, talk

512

about retirement, but these things

are a little bit farther off in

513

time and perhaps not as visceral.

514

But if we can step in at an inflection

point in a client's life and really

515

add a ton of value, I think that

makes me feel like I'm adding,

516

you know, more to the client, and

the client sees this real well.

517

So that's why I'm a big fan of just, like,

focusing on these inflection points where

518

we can help out Yeah, that's fantastic.

519

And it goes along with

the whole entire planning.

520

Plan ahead, whether it's tax planning,

financial planning, estate planning.

521

It's very important.

522

Yeah.

523

Shane, great conversation.

524

Let's finish up.

525

Bring out your crystal ball

here real quick, and let's,

526

uh, fast-forward five years.

527

What do you think will separate the

leading advisory firms from everyone else?

528

And will tax-aware portfolio

construction become a standard

529

like financial planning is today?

530

And, um, you know, years ago

when I started, not many advisors

531

do- did financial planning.

532

Now they have to.

533

It's like table stakes.

534

Do you think tax-aware portfolio

construction will be the same?

535

I, I think so, and I think that it's gonna

be sort of table stakes, you know, five

536

years, you know, out where, you know,

individual advisors are gonna have to

537

have a strong grasp of these solutions.

538

And they've just become so

democratized, you know, so popular.

539

You know, they're being covered in the

media, and so people are reading about

540

them and learning about them, and they're

gonna have questions for advisors.

541

So, you know, it's important for us

to really get a strong understanding

542

of how these tools work, how they

can help, what are the trade-offs.

543

There's no free lunch, right?

544

There's risks, but there's also benefits.

545

Um, and really getting a

grasp of that, I think that's

546

gonna be sort of table stakes.

547

The other thing I- I'll say, too,

is, you know, and I sort of obviously

548

have a, you know, horse in this race

in that we are an independent SECRA.

549

I do think that we're gonna

continue to see growth of the

550

independent channel, right?

551

Obviously, you can work with an advisor

at a bank, a brokerage, you know, a

552

broker-dealer, wirehouse, uh, as well

as an independent, you know, firm.

553

And part of the reason is that because

the product set is evolving and there's

554

so much proliferation of just the sheer

number of products, the complexity,

555

independent advisors are very well

situated to adopt these very quickly,

556

to, you know, be very agile and, you

know, c- fast in the decision-making and

557

ultimately help clients implement it.

558

So, you know, I think we'll continue to

see the growth of the independent channel.

559

Perhaps a lot of advisors will jump in,

like myself, and launch their own firms.

560

But it's all a very exciting

time to be an advisor.

561

Yeah, you are exactly right, Shane.

562

That's a great way of wrapping up this

conversation because, like you said,

563

there-- Investment management, offering

mutual funds, ETFs, just individual

564

stocks, it's y- it's commoditized, right?

565

It's commoditized.

566

Investors, they can go,

you know, Robinhood.

567

They can go online and get basically

all those different investments.

568

What I think is gonna separate

themselves, you know, being

569

independent so you can offer different

planning services like tax planning,

570

tax-aware portfolio construction.

571

That's really how you're gonna be

able to separate yourself, and I

572

think that's where we're gonna be

moving forward, you know, in five

573

years is more the relationship

building versus a transaction.

574

And exactly what you said, everything

that we've talked about really point

575

goes to that picture, that direction

of, you know, relationship building.

576

Absolutely.

577

Shang, thank you so much

for coming on the show.

578

Great conversation.

579

I learned a lot.

580

Really fascinating stuff.

581

I love talking about the different

ways of building portfolios, evolving

582

from modern portfolio theory to, you

know, more tax planning, tax alpha

583

generating, the three dimensions.

584

Fantastic stuff.

585

Really fun.

586

Where can our listeners get more

information about Dishme Capital?

587

Yeah.

588

Um, I'm very reachable, whether it's on

LinkedIn or Twitter, you can find me.

589

Um, you can visit our website.

590

Uh, I have a personal blog I run.

591

It's just www.taxalphashang,

592

uh, .com.

593

And, you know, I…

594

That's where I publish some of

the writing that we do, uh, as

595

well as, you know, things like

podcasts like this event, Ryan.

596

So folks can visit that and,

and watch and read some more.

597

So more than welcome to reach

out anytime if anyone wants

598

to continue the conversation.

599

Yeah.

600

Fantastic, Shang.

601

Thank you.

602

And thank you everyone for listening.

603

You can watch all of our other episodes

on YouTube and all the other platforms

604

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605

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606

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607

Thank you very much and have

a great rest of your week.