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Helping clients preserve, protect, and grow their wealth

by Dec 13, 2023Advisor perspectives

Helping clients preserve, protect, and grow their wealth

by Dec 13, 2023Advisor perspectives

David Shimana, CPA, CWS, AIF • Honolulu, HI
First Allied • First Allied Securities Inc.
Read full biography below

Proactive Advisor Magazine: David, please talk about your path to founding your advisory firm.

After graduating from the University of Hawaii with a degree in accounting, I worked for a large international CPA firm. I met many great people and learned a lot, but it wasn’t a good fit for me. As an auditor, although we were helping the client, it didn’t always feel that way. We were a necessary “evil.” I wanted to do something more positively aligned with the client’s goals. I also wanted a career I was passionate about.

While earning my MBA, I was a student teacher. I enjoyed helping others learn but knew I did not want to pursue a career as a professor. I had been investing in mutual funds since my early 20s, so the MBA course I found most interesting was taught by a retired investment manager. I did well in the course, which focused on investment management and portfolio construction. I think this planted the seed that I might consider working in financial services.

However, after earning my MBA, I decided to continue serving as a CPA, working at two prominent Hawaiian banks. After a few years, an old friend who had transitioned from CPA work to financial advising recruited me to the firm he worked for, which did consulting for participants in tax-qualified retirement plans. I will always be grateful for his mentorship in helping me get my start in the industry.

Today, I have over 23 years of experience as a financial advisor. I started my career at a large national company and have also worked with a smaller ensemble practice focused on comprehensive financial planning and wealth management. I have run my own advisory business for 16 years. In addition to my CPA background, I have earned the Certified Wealth Strategist and Accredited Investment Fiduciary designations.

Related Article: The decision to invest in gold should not be reactive

Describe your client base and how you see your firm’s mission.

Our clients are primarily retirees, pre-retirees, and small-business owners. We also work with some of the children of our clients. Our firm specializes in retirement planning, risk management, investment strategy, and portfolio management.

Through our affiliation with First Allied, we can offer the objectivity of working with an independent advisor as well as the resources of a full-service independent brokerage firm. Our objective, long-term decision-making approach helps our clients make informed decisions. By crafting a proactive, adaptive plan that addresses a client’s entire financial picture, we can guide them through changing economic and market scenarios.

On my office wall, I have three Japanese calligraphy characters that represent the concepts of preserving, protecting, and enhancing or growing. These symbols, in that order, represent the philosophy of our firm and what we’re trying to achieve for our clients. My practice philosophy and process have evolved over the years. I believe in the value of ongoing professional education, sharing knowledge with peers and professionals in other disciplines, and having a mentor. I also learn from our firm’s work with clients, including successes and occasional instances where hindsight shows we might have done better.

“Our goal is to make a positive difference in clients’ lives.”

Discuss your financial-planning process for different types of clients.

We believe every client is unique. They have different ages, careers, family lives, financial experiences, risk appetites, and backgrounds. We break down our service offerings by client types, which include targeted-solution clients, investor clients, and comprehensive-planning clients—or what I call situational-planning clients. Targeted-solution clients want a product solution for a specific concern or issue that is a major priority. They tend to work with us on a limited basis for guidance on the most appropriate solution for their current circumstances, such as life insurance, long-term-care insurance, or a fixed annuity.

Investor clients want professional support to help design, implement, and manage an effective investment strategy that reflects their risk profile and investment objectives. This includes research, analysis, portfolio construction, strategy selection, and implementation and monitoring.

Comprehensive- or situational-planning clients may want our help with a targeted solution and investments. They also usually want assistance with investing toward achieving long-term goals, preparing for retirement across different decision areas, retirement-income planning and projections, needs analysis for life insurance or long-term-care insurance, and estate planning. We also can help with budgeting and cash-flow management, break-even analysis of spending on projects or real estate, paying off mortgages, managing debt, and planning for college funding. We also may discuss and strategize on ideas to enhance their quality of life. Where appropriate, we recommend the services of trusted third-party professionals in other disciplines.

What is your broad investment approach?

First, our firm uses what we call a core and explore approach. The investment products we use for the core part of our clients’ portfolios are meant to preserve and protect wealth or manage risk, as well as grow a client’s wealth over a full market cycle and in different economic cycles. The core element, which employs essentially what is known as an all-weather approach, uses traditional assets such as stocks and fixed income and supplements them with several different asset classes such as commodities, currencies, precious metals, and alternative strategies. We believe this provides more diversification and risk management than the traditional 60/40 portfolio of stocks and bonds.

The explore part of the portfolio varies based on client investment goals. For many clients, we are using a heavier allocation to gold than what is in their core, as our analysis shows this asset class is currently undervalued. Explore strategies fall into many different areas and usually represent specific strategic opportunities offered by our third-party investment managers. We regularly evaluate non-correlated strategies that can help better manage risk while offering the potential for attractive returns.

Secondly, we account for both market and economic cycles, or regimes, and how they affect asset-class performance. The four stages are inflationary growth, inflationary recession, deflation/disinflationary growth, and deflationary/disinflationary recession. Different asset classes perform better than others during each stage. Because no one can predict the future, the all-weather approach uses different third-party systematic investment managers and a range of strategies—for example, buy-and-hold, trend following, hedging, and momentum—to hedge risk and identify which asset classes appear to be in favor over different time horizons.

Lastly, our philosophy considers positive expectancy, which assesses how quickly a strategy can yield positive returns even if you invested at the worst possible time. We look for strategies with a positive expectancy of three to four years or less. This makes it easier for clients to stick with a strategy. A poor example of positive expectancy would be buying and holding an S&P 500 Index product at the market peak in March 2000. It would not have been profitable until the fall of 2014. Most problems with retirement planning come from this type of unmanaged market risk. Combining several dynamic and adaptive strategies to provide multiple levels of diversification is at the heart of our approach to investment risk management.

Chuck and Glenda Bigbie

What qualities do you want clients to associate with the experience of working with your firm?

I hope they believe we will always work in their best interests, providing knowledgeable and experienced-based guidance. We speak about what I call our firm’s five core values when it comes to client relationships: care, character, chemistry, competence, and consultation. Our goal is to make a positive difference in clients’ lives. I believe clients will see that we do so in a manner consistent with those values.

David M. Shimana is a wealth advisor with First Allied Securities, serving clients in Hawaii and across the U.S. His firm specializes in retirement planning, risk management, investment strategy, and portfolio management.

Mr. Shimana was raised near Honolulu in Aiea, Oahu. His father was a Korean War veteran and became a personnel director for the state of Hawaii. His mother worked as a preschool teacher and health aide. Mr. Shimana says his parents were “family-oriented and always encouraged my brother and me to work hard in school.”

Mr. Shimana attended the University of Hawaii. He graduated with distinction, earning a bachelor of business administration degree with a major in accounting. He worked in the university’s fiscal office to help pay for his tuition. He was a member of the local chapter of the international honor society for accounting, finance, and information systems students.

Following college, he began a career with a national CPA firm. After two years as an auditor, he returned to the University of Hawaii to obtain an MBA degree in accounting and work as a student teacher. He says, “The MBA program provided exposure to courses beyond accounting, including finance. I was very interested in learning about portfolio construction and investments.”

Mr. Shimana worked as an auditor for Bank of Hawaii, First Hawaiian Bank, and the University of Hawaii before being recruited to a company specializing in tax-qualified retirement plans. He served 403(b) plan participants at educational institutions. Mr. Shimana also spent five years working as an independent financial advisor affiliated with a large U.S. broker-dealer. He says this experience helped refine his holistic approach to wealth management. He has been the principal advisor of his own firm for over 16 years.

In addition to his CPA background, Mr. Shimana has earned the Certified Wealth Strategist (CWS) and Accredited Investment Fiduciary (AIF) designations. Outside of the office, Mr. Shimana is an active member of New Hope Christian Fellowship and enjoys working out and spending time with his family and friends.

Disclosure: Securities offered through First Allied Securities Inc. A registered broker-dealer. Member FINRA/SIPC. Advisory services offered through First Allied Advisory Services. First Allied entities are under separate ownership from any other named entity. 1600 Kapiolani Boulevard, Suite 1408, Honolulu, HI 96814, (808) 952-5341.

David Shimana is not in public practice as a CPA. Certified Wealth Strategist and CWS are registered trademarks of Cannon Financial. Accredited Investment Fiduciary and AIF are registered trademarks of Fi360, a Broadridge Company.

The views stated in this article are not necessarily the opinion of First Allied Securities Inc. and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing. Asset allocation is an investment strategy that will not guarantee a profit or protect you from loss. A diversified portfolio does not assure a profit or protect against loss in a declining market. The return and principal value of stocks fluctuate with changes in market conditions. Shares when sold may be worth more or less than their original cost. The return and principal value of bonds fluctuate with changes in market conditions. If bonds are not held to maturity, they may be worth more or less than their original value.

Photography by: David Murphey


Five core values drive interactions with clients

David M. Shimana, CPA, CWS, AIF, is a wealth advisor with First Allied Securities, serving clients in Hawaii and across the U.S. His firm specializes in retirement planning, risk management, investment strategy, and portfolio management.

Mr. Shimana says, “For more than 16 years, we have served as independent wealth advisors to our clients and their families. We have built our practice around helping families with all of their financial concerns and providing a safe, comfortable environment for them. Generational family planning, legacy planning, and education are at the heart of our firm, and we offer clients an attentive, personal process.”

His website outlines the following five core principles that drive his firm’s interactions with clients:

Care: As President Theodore Roosevelt once said, we believe that people don’t care how much we know until they know how much we care. Because of this, we work hard to deliver a high level of service and care to each and every client.

Character: Our family values and principles shine through when working with clients. We cultivate relationships built on trust that often lead to lifetime friendships.

Chemistry: We learn as much from our clients as they learn from us, which is why it is crucial to have client-advisor chemistry. We work best with clients that share our values and passion for stewardship.

Competence: Not only are we values-driven, but we are also highly qualified and have dedicated ourselves to furthering education. Our founder, David Shimana, is a Certified Wealth Strategist, Accredited Investment Fiduciary, and former CPA.

Consultative: Before even talking about products or financial plans, we get to know our clients on a deeper level and establish what matters to them. Only then do we design plans according to their goals.”