A Masterclass in Business: Money Philosophy with Barry Ritholtz (EP.57)

Aug 1, 2019

In this engaging conversation, Barry Ritholtz, the founder and CIO of Ritholtz Wealth Management, shares his insights on the financial industry. He discusses the evolution of his firm, emphasizing a low-cost, diversified investment philosophy that aligns with client goals through behavioral counseling. Barry reveals his thoughts on why traditional brokerage firms still thrive despite better options. He also candidly reflects on his changing views regarding market efficiency and defines success as having control of time and doing stimulating work.

Ask episode

AI Snips

Chapters

Books

Transcript

Episode notes

ADVICE

Choose Fiduciary, Build Complementary Roles

Run an RIA if you want fiduciary alignment and fee-based advice rather than commission-driven sales.
Build a team to cover compliance, back office, and client acquisition instead of doing everything yourself.

ADVICE

Use Planning Before Portfolios

Integrate financial planning into portfolio recommendations with a light plan before onboarding.
Use planning to align risk with goals so clients avoid excessive volatility for no purpose.

INSIGHT

Simple Global Allocation With Small Tilts

RWM favors a low-cost, globally diversified allocation that modestly tilts to value and small cap.
They emphasise that markets are mostly efficient and investors should avoid home-country and sector biases.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

On today's episode we are so happy to be joined by none other than Barry Ritholtz! As the founder and CIO of Ritholtz Wealth Management, host of the Masters in Business Podcast and regular financial blogger for more than 15 years, Barry is someone we have been dying to speak to on the show and who we have taken loads of inspiration from over the years. We talk to Barry about his own podcast which has been going strong for years now and is just about to reach its 250th episode! He also explains the beginnings of his firm and how his role has evolved in it since it started. From there, the conversation turns to the different parts of an investing philosophy we and Barry pretty much share and we ruminate on the state of the financial industry in US and Canada currently. We all feel that it is surprising that brokerage firms still find business in this day and age, when it has been shown so many times, for an extended period of time to be a far inferior business model for clients. Barry offers some pretty sensible advice on how to pursue financial growth in the long term and shares how RWM approaches client acquisition. For all of this and so much more, be sure not to miss this great episode!

Key Points From This Episode:

Why Barry feels he has the easiest gig in podcasting. [0:03:17.6]
The inspiration behind starting the firm and Barry's day to day work. [0:05:53.9]
The RIA model versus the brokerage model in investment firms. [0:12:45.4]
How Barry and the firm have chosen to run their business model. [0:16:03]
Specific portfolios at Ritholtz and the philosophy behind them . [0:21:18.8]
It's no good breaking a record if you crash straight after! [0:28:13.1]
How Barry and the firm find customers and the client conversations they have. [0:34:04.2]
Behavioral counseling as RWMC's biggest value proposition. [0:42:34.8]
Barry's opinions on robo-advisors and the factors to consider. [0:47:06.2]
Why are there still commission based advisors in 2019? [0:50:38.9]
Things Barry has changed his mind about since starting the firm in 2013. [0:55:09.9]
Small cap tilts, lower rates and the longer term vision that is necessary. [1:01:11.1]
How Barry defines success in his life. [1:07:01.5]
And much more!