Search results for: Financial Times Top 300 Advisors

FT 300: Top Registered Investment Advisers

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We are honored to announce that our firm, Ritholtz Wealth Management, has been named to the FT 300 list for 2017. This is a ranking of the top 300 registered investment advisers in the United States according to a comprehensive set of metrics developed by the Financial Times. The list is merit-based, and selects only the best in firms in each state according to that methodology.

For a young firm like ours (we are not quite 4 years old) it is an honor to be included. I am blessed to work with some great partners in Josh, Michael, and Kris; we have a wonderful staff, and a great group of professional advisors, CFAs and CFPs. What we do is the result of a team effort — RWM is a true ensemble practice.

Our goal is to continue delivering the finest services we can to our clients around the nation. We are fortunate to have an engaged, thoughtful and fascinating group of people as clients. We try to live up to the high standards and expectations you hold for us every day.

We are grateful to be included. See you there tonight for a drink . . .

 

 

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Video-O-Rama: Figuring out the lie of the financial land

Video-o-rama: Figuring out the lie of the financial land

In addition to more “Outlook for 2009” videos (dealt with in last week’s Video-o-rama), the past week saw material covering a hodgepodge of topics. Although the topics were varied, good viewing material was produced, with the likes of Marc Faber, Peter Schiff, Martin Feldstein, Barton Biggs, Jeff Saut and Bill Gross in attendance.

A few of the more interesting clips that attracted my attention are shared below, including a few items warning about a bubble in government bonds.

But before we get to the economy and the financial markets, please spend a few minutes viewing a worthwhile three-part production by the Wall Street Journal entitled the “End of Wall Street” – What happened? Why did it happen? And what happens next?

The Wall Street Journal: End of Wall Street
Chapter one: What happened?. In the first of this three-part series, Journal reporters explain how the housing bubble inflated and burst, and why easy money led to the collapse of Wall Street’s biggest financial institutions.
Click here or on the image below for Chapter one.

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Chapter two: Why did it happened? What was going through the minds of CEOs, corporate boards, fund managers and mortgage lenders as they created hard-to-understand derivatives Warren Buffett once called ‘weapons of financial mass destruction’.

Click here for Chaper two.

Chapter three: What happens next? This final chapter of the crisis on Wall Street tells the story of the $700-billion bailout, as seen through a reporter’s eyes, and looks at what’s ahead for the global economy.

Click here for Chapter three.

Source: The Wall Street Journal, January 5, 2009.

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About Barry Ritholtz

 

Barry L. Ritholtz is the co-founder and chief investment officer of Ritholtz Wealth Management LLC. His focus has long been how the intersection of behavioral economics and data analysis affects investors.

Launched in 2013, RWM is a financial planning and asset management firm, with over $825 million in assets under management, offering Financial Planning and Wealth Management to the investing public. In 2017, RWM was named ETF Advisor of the Year. The firm was also named to the Financial Times Top 300 Advisors in the US, and is the 4th fastest-growing RIA in America, according to Financial Advisor magazine.

“To say that Barry Ritholtz ‘pulls no punches’ is like saying that Joe Louis had a nice right cross.”-Jesse’s Café Américain

Ritholtz has long been a frequent critic of the excesses of Wall Street and the failures of the press in its coverage of finance. Named one of the “15 Most Important Economic Journalists” in the United States, he has been called one of the 25 Most Dangerous People in Financial Media. He writes a daily column for Bloomberg Opinion (2013- ) and previously, a twice monthly column on Personal Finance and Investing for The Washington Post (2011-2016).

He is also the creator and host of Masters in Business, a popular radio show/podcast on Bloomberg Radio. A 90-120 minute deep dive with sone of the most important people in business and finance, the radio/podcast can be found on iTunesSoundcloud, and Bloomberg. The ground-breaking podcast quickly set the standard for business interviews, helped to “podcastify” Bloomberg, and led to many new finance podcasts. It has quickly became one of Bloomberg’s most popular shows.

Ritholtz has been called the “blogfather” for his long-standing finance weblog, The Big Picture. TBP generates 1-2 million page views per month, and has been covering everything investing related since 2003. The blog has amassed ~150 million visitors over that 15 year period. Media accolades include TED named TBP one of top 100 Websites You Should Know and Use; TBP was featured in the 10th annual New York Times magazine “Year in Ideas,”(DIY Economics); Numerous traffic sites rank The Big Picture as one of the most trafficked Markets/Economic’s blogs on the web.

In 2008-09, Ritholtz wrote the book Bailout Nation, published by Wiley in 2009; with an updated paperback released in 2010. Bailout Nation became the best reviewed book on the bailouts, with NYT calling it “Irreverent,” and “an important book about a complicated subject, and yet you could still read it at the beach.WSJ noted “If you want to know how we got into this mess and what might still be coming, this is the book for you.” Bloomberg praised it as “A valuable new contribution to our understanding of how we arrived at this sorry juncture.” Bailout Nation was named “Investment Book of the Year” by Stock Trader’s Almanac, and won a First Amendment Award for Outstanding Journalism: Best Book. Numerous media — USA Today, Miami Herald, Marketplace Radio — named Bailout Nation as one of the best finance/business books of 2009.

One of the few strategists who saw the the coming housing implosion and derivative mess far in advance, Ritholtz issued warnings about the market collapse and recession to clients and readers to seek safe harbor. Dow Jones Market Talk noted that “many market observers predict tops and bottoms, but few successfully get their timing right. Jeremy Grantham and Barry Ritholtz sit in the latter category…”  (A summary of major market calls can be found here). His observations are unique in that they are the result of both quantitative data AND behavioral economics, and a function of his unusual career path in finance.

A regular guest in the media, Ritholtz has been profiled in the Wall Street Journal’s Quite Contrary column (August 3, 2004; Page C3), and was the subject of several Barron’s interviews (December 8, 2008 and October 26, 2010). Ritholtz was honored to be the dedicatee of Stock Trader’s Almanac‘s 40th Anniversary edition in 2007 and the Yahoo Tech Ticker’s Guest of the Year in 2009.

Mr. Ritholtz performed his graduate studies at Yeshiva University’s Benjamin N. Cardozo School of Law in New York, where he focused on Economics, Anti-Trust and Corporate Law. He was a member of the Law Review, and graduated Cum Laude with a 3.56 GPA. His undergraduate work was at Stony Brook University, where on a Regents Scholarship, he focused on Mathematics and Physics, graduating with an Bachelor Arts & Sciences degree in Political Science. He was a member of the Stony Brook Equestrian Team, and competed successfully in the National Championships (1981) of the Intercollegiate Horse Show Association. In addition to writing the National Affairs column for the campus weekly (The Stony Brook Press), he was elected Vice-President of the student body. (Ritholtz best describes it as his Bizarre Academic Career)

He sits on the Board of Advisors of Riskalyze (creating quantitative measurements of client risk tolerances) and Peer Street (a marketplace that provides unprecedented access to high quality real estate loan investments). He is also an investor in StockTwits, a Twitter based stock community.

When not bemoaning the New York Knicks‘ all-too-frequent offensive lapses, Mr. Ritholtz is a vintage sports car enthusiast. He and his wife Wendy, an artist and teacher, live on the North Shore of Long Island, New York with their monsters Teddy and Jackson.

Paying for Advice

The world’s first financial advisor is Joseph, son of Jacob. He is doing asset management for the Egyptian Pharaoh and he also kind of invents the very first national pension system.

Pharaoh’s assets are the lands themselves and the agricultural crop that can be produced from them. He is having nightmares about seven fat cows and then seven lean cows. Jacob, a prisoner at first, interprets these dreams to mean that seven bountiful years are coming but they will be followed by seven years of famine and pain.

Pharaoh appoints him as his financial advisor and allows him to commandeer a fifth of every Egyptian farmer’s harvest to comprise an emergency store of grain. When the famine begins, Pharaoh’s got the resources saved up to continue feeding his people, sort of like social security for citizens who are no longer able to earn a living. Joseph is paid in return for his advice to the ruler and his country – the Pharaoh tells him to send for his entire family and tribe of Jews from Canaan and to bring them to Egypt to settle a portion of its farm land.

Joseph guided the Pharaoh’s portfolio and saved his assets from ruin. In exchange for his crucial advice, he was paid an asset-based fee – a portion of the farmland.

***

As of August 1st, my firm’s tactical asset allocation portfolio, called Goaltender, has been 100% invested in US stocks for 25 straight months without interruption. Let me repeat that. This particular strategy has now gone 25 straight months of being 100% long US stocks. We take zero credit for having seen the any of the recent bull market coming in advance, as Goaltender is entirely rules-based and our own feelings do not enter into its allocation decisions.

We almost never discuss our tactical asset allocation strategies publicly (two rare exceptions here and here) and even in this case I won’t be (can’t be) getting into any details. But there’s a bigger point I want to make here…

First, some rhetorical questions:

How many other tactical strategies out there have been fully invested in US stocks since July of 2016 without any hedges or sales or “swings to cash” during that period?

How many investors would have run a strategy like this for themselves and stuck with it the entire time?

How many professionals can set up a rules-based strategy and then actually stick with it without making tweaks and changes.

How many tactical strategies were built from the premise of “how can we trade the absolute least amount of times each year and almost never do anything, yet still be considered tactical?”

Goaltender is the only tactical strategy I’m aware of that was built internally at a wealth management firm with the express purpose of managing investor behavior rather than trying to outsmart the markets, generate alpha or call tops and bottoms. Almost every tactical strategy we’ve seen in the wild is oriented toward impressing people, beating markets, making rapid moves and incorporating economic data, sentiment surveys, fundamentals and other bulls*** that doesn’t actually work.

Ours is designed to make the trade that clients can’t, at the moment they can’t. The trades they won’t make themselves. If we called clients a week after Brexit at the beginning of July 2016, with the controversial US election looming just a few months ahead, and said “We want you to go 100% long US stocks right here, right now, and hold them for the next two years straight, no questions asked,” the response would not have been great. Which is why we are discretionary managers, running these strategies ourselves.

***

There are several reasons why financial advisors overwhelmingly charge clients for their services as a basis point fee on assets as opposed to hourly or on a monthly retainer.

One of the major reasons is that, at the end of the day, the financial advisor is going to be held responsible for what happens with the client’s invested assets, regardless of whether or not the value-add on an ongoing basis is perceived to be the asset management or the financial planning work.

It’s also possible to say that during 300 days a year it’s the planning work that is worth the most to the client but during the other 65 days a year, it’s the asset management that’s going to make the difference. We don’t know in advance which days will be the 300 and which will be the 65. The thing is, what goes on during those 65 days might have tremendous implications for the financial plan – positive or negative.

You’re welcome to hold yourself out to clients as a financial planner, but the truth is that they’re going to judge you on the portfolio you recommend. Even if you don’t manage it yourself and turn it over to a TAMP. Even if you just default to a five-ETF portfolio using all Vanguard. Even if you recommend seven mutual funds and never make a change. Even if you charge solely for financial planning hours and do the asset management part for free. When all is said and done, you’re going to keep or lose a client based on that asset management someday, and you’re going to have to discuss it throughout the year come bull markets or bear. You’re going to have to defend it at times when markets prove unfavorable to how you’re allocated. You’re going to have to defend it in light of underperformance or whenever some hot, new idea comes along that clients want to compare with what you’re doing.

You may as well be paid for it.

***

As a financial advisor, you will own the asset allocation more than anything else, even if the personal relationship and the planning piece is a lot more meaningful than the fund selection.

This is regardless of what kind of people your clients are, what region of the country you serve, which type of firm you work at. That’s also your biggest risk – that someone is furious about how their assets have been allocated. Shouldn’t everyone in every profession be paid based on the thing that is their biggest risk? Why would a client want it otherwise? They’re handing you their money to invest in the portfolio that you recommend. If you do a bad job, they’re taking the money out of the portfolio you recommend. You have skin in the game now, in a way a retainer fee simply doesn’t capture. This is actually what clients want. The best evidence of that is the incredible shift in investable assets away from almost every other channel of wealth management directed straight into the RIA channel.

There are now 18,800 retail-focused (Registered Investment Advisory) RIA firms in America. 687 of them manage over a billion dollars and account for 60% of the industry’s total assets under management. These firms are the future. Trillions of dollars have moved to the RIA space. None of it at gunpoint, that I’m aware of.

People are voting with their dollars and their vote is for asset based fees in exchange for a relationship with a financial advisor who manages their portfolio.

***

I didn’t make it this way, I’m just telling you how it works in the real world. I’m sorry if this doesn’t align with how you feel it should be or what logic would dictate. Twenty one years in the game, my friends. When I see a reporter or a columnist opine on the compensation structure of financial advisors, I read it with an open mind. Perhaps there’s some merit to what they’re saying in some cases.

But then I remember that a true financial advisor doesn’t really earn their fees until the big moment. That moment where a client wants to double their exposure to technology stocks after a 500% rally they feel they didn’t get enough out of. That moment where someone with a thirty year retirement ahead of them is about to succumb to volatility and liquidate a stock portfolio after 8 months of a bear market. That moment where a client wants to shift to an all US stock portfolio precisely as international stocks are on the verge of going on a five year stretch of massive outperformance. That moment when a client is tempted to put five percent of their net worth into Bitcoin at $18,000 per…whatever, coin I guess?

And when these moments happen, the advice they get at that time is not simply worth a basis point fee. It’s worth everything. It could be worth a lifetime’s sanity every day thereafter. I’ve seen decisions made and consequences suffered the likes of which you couldn’t imagine. Between 2010 and 2015, we would come across at least one or two investors a week who had been miserably sitting in cash since 2008 and didn’t know what to do. None of these cases involved a client who had an advisor currently working with them. Hundreds of thousands of dollars in foregone gains (in some cases millions) had been left on the table due directly to the absence of professional help.

For those who have never been on the phone with a client – a human being – whose liquid assets and entire life savings are in a twenty percent drawdown, alarm bells ringing throughout the media and blood-red stock quotes everywhere they look, you really have no idea what fee is worth what amount, to whom, and why. If you’ve never sat with someone who is so utterly convinced that their family’s future and their freedom is slipping away before their very eyes, you probably don’t need to have a strong opinion about what they should or should not be willing to pay for help.

***

And for those who don’t understand why the financial planning work and the asset management work that advisors do are inextricably linked – why they are not merely a la carte items on a buffet’s steamer table, ready to be unbundled and consumed separately, in any particular order – I don’t know what to tell you.

I’m not sure how you can invest someone’s entire life savings without understanding how and when the money is ultimately going to be used. I’m not sure how you can construct a financial plan for someone and then act as though the way they reach their goals via the investment markets is somehow less relevant or worthy of attention.

Financial planning in the absence of an investment strategy designed to implement the plan is a f***ing fortune cookie. An investment portfolio absent the dictates of the goals from a financial plan is like building a house without a blueprint. Neither or these things is worth much without the other. But delivered in concert, they are essential and worthy of a fee for the people who are going to be overseeing both.

***

We don’t take requests. We’re not the wedding DJ.

People come to us and tell us what they want (or what they think they want) and it’s our job to show them what they actually need instead. If we’re talking to someone rational and intelligent, they get it immediately.

They’re relieved to be told what they should be doing rather than being presented with a menu of options. They’re excited about a future in which they can tune out virtually everything and focus solely on spending the money they’ve saved based on what’s important to them. They like having their financial information organized and presented in a way that illustrates possibilities and priorities. They like the peace of mind knowing that they’re making ongoing decisions in consultation with an advisor who understands their personalities, their spending needs, their tax situation, insurance coverage, estate plan and their future hopes and dreams. They also like having someone else be partly responsible for the burdens of investing large sums of money on behalf of other members of their family. The planning and the investing functions are integral to all of this value being created and enjoyed.

This is why the wealthiest, most successful people in America are working with wealth management firms and paying an asset based fee. It’s why they always have and they always will. Gladly.

***

Talk to us about portfolio and financial plan here. 

 

 

~~~

This post was originally published on August 9, 2018. at The Reformed Broker

10 Monday AM Reads

My morning train plane reads:

• You Can Time The Market, Just Not All The Time (Wall Street Journal)
• The Housing Bubble Burst All Over Reality TV (New York Times)
• Meet the Shalennials: CEOs Under 40 Making Millions in Texas Oil (Bloomberg)
• An Equator Full of Hurricanes Is a Preview of End Times (Wired)
• How much would the iPhone cost if it were made in America? (Vox)

Be sure to check out our Masters in Business interview this weekend with David Nadig, managing director of ETF.com. Previously, he was director of ETFs at FactSet Research Systems. Nadig helped design some of the first ETFs at BGI, and as co-founder of Cerulli Associates, he conducted some of the earliest research on fee-only financial advisors and the rise of indexing.

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10 Sunday Reads

My easy like Sunday morning reads:

• The NFL’s Very Profitable Existential Crisis (Bloomberg)
• 3 Investments That May Have Hit Their Peak (New York Times)
• Investors Should Assume That They Are No Better Than Average (Behavioural Investment)
• Why we buy the things we buy (Vox)
• Open Letter to Times Op-ed Writer: Go Public Now, Before They Bust You (Daily Beast) see also Nobody’s Heroes: Bob Woodward’s New Book Presents Trump Staffers as Our Last Line of Defense. We’re Doomed. (Slate)
• A World With Fewer Babies Spells Economic Trouble (Bloomberg Businessweek)
• How to Win in Venture Capital: Focus on the Fat Tails (Noteworthy) see also Atoms and Bits (AVC)
• Amid nationwide strike, media access to prisons is limited (Columbia Journalism Review)
• Trump’s long history of lying about 9/11 and exploiting it for personal gain (Washington Post)
• The Dynasty That Never Was: Inside the Unraveling of the Seattle Seahawks (Sports Illustrated)

Be sure to check out our Masters in Business interview this weekend with David Nadig, managing director of ETF.com. Previously, he was director of ETFs at FactSet Research Systems. Nadig helped design some of the first ETFs at BGI, and as co-founder of Cerulli Associates, he conducted some of the earliest research on fee-only financial advisors and the rise of indexing.

 

 

Nuclear security is improving almost everywhere

Source: Economist

 

 

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10 Weekend Reads

The weekend is here! Pour yourself a mug of French Roast coffee, grab a seat by the window, and get ready for our longer form weekend reads:

• The real Goldfinger: the London banker who broke the world (The Guardian)
• A Warning From Europe: The Worst Is Yet to Come (The Atlantic)
• Inside the World of Eddy Cue, Apple’s Services Chief (The Information)
• Seattle’s last 3 video rental stores strive to remain part of the neighborhood (Seattle Times)
• Startups Flock to Turn Young Blood Into an Elixir of Youth (Wired)
• The mystery of Tucker Carlson (Columbia Journalism Review)
• ‘Bless Nixon for Those Tapes’: An Interview with John Dean (New York Review of Books)
• What Is Threatening Science? (Project Syndicatesee also Are the foot soldiers behind psychology’s replication crisis saving science — or destroying it? (Chronicle of Higher Education)
• On going on and on and on: The fantasy of living forever is just a fig leaf for the fear of death – and comes at great personal cost (Aeon)
• The Untold Stories of Paul McCartney (GQ)

Be sure to check out our Masters in Business interview this weekend with David Nadig, managing director of ETF.com. Previously, he was director of ETFs at FactSet Research Systems. Nadig helped design some of the first ETFs at BGI, and as co-founder of Cerulli Associates, he conducted some of the earliest research on fee-only financial advisors and the rise of indexing.

 

Most Brexit bills are caught up in a slow legislative grind

Source: Economist

 

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10 Weekend Reads

The weekend is here! Pour yourself a mug of Danish Blend coffee, grab a seat in the beach house, and get ready for our longer form weekend reads:

• New Details About Wilbur Ross’ Business Point To Pattern Of Grifting (Forbes)
• Ten Years After the Crash, We Are Still Living in the World It Brutally Remade. (New York Magazine)
• What Trauma Docs Know (Chicago Magazine)
(Medium)
• James O’Shaughnessy Interview: How he rewrote the rules on stock market investing (Stockopedia)
• Inside the Very Big, Very Controversial Business of Dog Cloning (Vanity Fair)
• Visions of Bitcoin: How major Bitcoin narratives changed over time
• The Cognitive Biases Tricking Your Brain (The Atlanticsee also Denialism: what drives people to reject the truth (The Guardian)
• How Broad, and How Happy, Is the Trump Coalition? (The Upshot)
• The Spy Who Drove Me (GQ)
• This NASA spacecraft is about to probe one of Earth’s scariest threats — the sun (Washington Post)

Be sure to check out our Masters in Business interview this weekend with Lee Cooperman, CEO/Chairman of Omega Advisors, a New York-based hedge fund managing $3.5 billion dollars, which is being converted into a family office. Cooperman, 75, is an active philanthropist, a member of The Giving Pledge, and has committed to giving his wealth away in his lifetime.

 

World Reaches 1,000GW of Wind and Solar, Keeps Going

Source: BloombergNEF

 

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10 Monday AM Reads

My back to work morning train reads:

• Foreign investment in the United States plunged 32% in 2017 (CNN Money)
• Unlike most millennials, Norway’s are rich (BBC)
• The fallacy that became itself a fallacy (Medium)
• How the Kremlin crafted a popular brand: Putin (Washington Post) see also China and the world: how Beijing spreads the message (Financial Times)
• Tired of Being Crammed Into an Airline Seat? You Have Options (New York Times)

Be sure to check out our Masters in Business interview this weekend with Dave Butler, Co-Chief Executive Officer and Head of Global Financial Advisor Services at Dimensional Fund Advisors, which manages $600 billion dollars.

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10 Weekend Reads

The weekend is here! Pour yourself a mug of French Mocha coffee, grab a seat on the beach, and get ready for our longer form weekend reads:

• The Entire History of Steel: From hunks of iron streaking through the sky, to the construction of skyscrapers and megastructures, this is the history of the world’s greatest alloy. (Popular Mechanics)
• People Aren’t Dumb. The World Is Hard. (Freakonomics)
• The endless reign of Rupert Murdoch (The Monthly)
• Hell for Elon Musk Is a Midsize Sedan (Bloomberg Businessweek)
• Don’t imagine you’re smarter (London Review of Books)
• The Flawed Legend of Preet Bharara: Slip the martyrdom — he failed to prosecute the Wall Streeters who brought us the financial crisis (The Nation)
• How the BBC Lost the Plot on Brexit (New York Review of Books)
• So Many Seats, So Many Tax Breaks (New York Times)
• Inside the radical, uncomfortable movement to reform white supremacists (Mother Jones)
• How Smart Speakers Are Changing the Way We Listen to Music (Pitchfork)

Be sure to check out our Masters in Business interview this weekend with Dave Butler, Co-Chief Executive Officer and Head of Global Financial Advisor Services at Dimensional Fund Advisors, which manages $600 billion dollars.

 

Mortgage rates in the 21st century

Source: @lenkiefer

 

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