I have a lot to say in this post, but I don’t want to bury the lede – Ritholtz Wealth Management is coming to Los Angeles on April 29th to meet with clients and prospective clients who want to learn about what it’s like to work with an RWM financial planner.
We’ll also be meeting advisors who want to learn about what it’s like to join the firm. We’re going to be posting up at a beautiful space in West Hollywood.
In addition, Josh and I will be recording our podcast, The Compound and Friends, in front of a live audience with two killer guests. Stay tuned for more on how you can be there in-person.
Alright, here’s something I want to talk about: It’s hard to compete with other people’s money. I’ll explain in a few paragraphs, but first, some context.
Wealth management firms have two predominant ways to grow their business. The first is the traditional path of bringing on new clients. We’ve been extremely successful at this. Barry, Josh, Kris and I started in 2013 with less than $100 million in client assets. We just filed an ADV update showing that at the end of December 2023, that number has grown to $4.26 billion.
For the last decade, we’ve publicly shared our thoughts about the markets and how we think about investing. People have seen what we say when markets are going up. They’ve also had the chance to see if our behavior or attitude about money changed when volatility spiked and stocks were in free fall. Our message is consistent even if the market never is.
The outside observer might think that fans become clients because they like what we have to say. That’s only partially true. Nobody has ever said, “Hey, great blog post, take my money.” We’ve been able to organically raise hundreds of millions of dollars a year in new assets because we’re good at what we do. The actual wealth management practice, the part the public doesn’t see, is every bit as powerful as the content machine we’ve created. In my opinion, we have phenomenal planners, traders, ops people, and an incredibly talented team overseeing it. The engine is firing on all cylinders.
The other way RIAs grow their businesses is by adding established advisors who can bring their clients with them. We’ve been doing this since 2015, and our process has evolved over time. Some things have changed, while others have stayed exactly the same. Let’s start with what hasn’t changed.
We’ve had this internal mantra for the last decade that we will never stray from; if it’s not an obvious yes, it’s a no. Obvious yes’s don’t come around too often. First and foremost, we’re looking for the right type of personality. Confident but not arrogant. Polished but not stuck up. Smart but not a know-it-all. Then, they must share our core principles regarding how they want to work with clients. Planning first, everything else second. Lastly, the economics have to work. And this is where things have changed.
We used to be able to take on any obvious yes, almost regardless of how many clients they could bring over. And we followed that script for a long time. But the economics of our business have changed over time. Our operations people are very busy. We service thousands of existing households and are always adding new ones. Our team isn’t sitting around waiting for advisors to join. And they can’t stop what they’re doing every time we onboard a new advisor. So, we must be thoughtful about where it makes sense to direct our most precious and finite resource: Time.
Adding advisors is a competitive game, mostly played with other people’s money. If you manage a lot of assets and are near anything remotely resembling a major metropolitan city, you’ve probably been offered a substantial amount of money to bring your clients over to firm XYZ. Firm XYZ sold a portion of its business to a private equity company, which is looking for a return on their investment. This has been one of the dominant themes of the wealth management industry over the last decade, and it’s not slowing down.
We’re not in this business.
We don’t have any outside shareholders telling us what to do. We don’t have any growth targets that need to be hit. What we do have is a very special culture that would instantly get vaporized if we started writing checks. All of our advisors who chose to bring their clients here did so because they believed in us. They did so because they thought this was the best place to serve their clients. They could have taken a check anywhere. They chose us instead.
We recently brought in an incredible advisor who we first met in New York in February 2020, right before the world shut down. She learned about us through her colleague, who was a fan of our podcasts. He is also here now working at RWM and is, to use a cliche, a total rock star. We immediately clicked with Michelle like we had known her for years. She is the epitome of the “obvious yes” that we’re looking for.
The timing when we first met her didn’t work out for obvious reasons, but we stayed in touch over the years. After a successful visit to Chicago, I said to one of my partners, “Man, imagine if we had somebody like this in Los Angeles.” I thought, wait, we do! She just doesn’t work here yet. So I got in touch with Michelle, and the rest is history.
Michelle joined us last July, bringing her clients here because she believes in us, not because she was trying to maximize her revenue. That’s a special person. And we want to work with as many special people like that as possible.
If you’re still reading this and you want to get in touch about our trip to Los Angeles, reach out to info@ritholtzwealth.com with the subject Los Angeles.
One last thing. I had an opportunity to talk about our business on a podcast recently. Almost all my time in front of the microphone is spent talking about investing-related topics, so to go on for an hour about what we’ve built was a lot of fun.
