Friday, 18 September 2020

Review of Ritholtz Wealth Management

Review of Ritholtz Wealth Management
27 Nov
10:29

Ritholtz Wealth Management specializes in portfolio management for individuals and institutions with a relatively high amount of investable assets. The firm has 18 advisors on staff and more than $1 billion in assets under management (AUM). Ritholtz is headquartered in New York City, and it offers a goals-based approach to portfolio management.

All information included in this profile is accurate as of November 26th, 2019. For more information, please consult Ritholz Wealth Management’s website.

Assets under management: $1,003,981,435
Minimum investment: $750,000
Fee structure: Percentage of AUM, ranging from 1.25% to 0.35%, depending on portfolio size
Headquarters: 24 West 40th Street, 15th floor
New York NY, 10018
https://ritholtzwealth.com
212-625-1200

Overview of Ritholtz Wealth Management

Ritholtz Wealth Management has been a registered investment advisor (RIA) since 2013. The firm has its headquarters in New York City and additional offices in California, Michigan, Illinois, Oregon, New York and Florida.

Ritholtz has 24 employees on staff, 18 of whom perform investment advisory functions. A number of directors at the firm hold advanced credentials, including the certified financial planner (CFP) and chartered financial analyst (CFA) designations.

The firm is privately owned, with co-founder Barry Ritholtz owning 43.1% of the firm and co-founder Josh Brown owning 28.9%. Other partners at the firm own the remaining stakes.

The firm’s co-founders are well-known financial advisors with long-time followings in the industry. Barry Ritholtz, who currently serves as the firm’s chairman and chief investment officer, is the author of the financial blog “The Big Picture” and the host of Bloomberg’s “Masters in Business” podcast. Josh Brown, the firm’s CEO, is the author of the blog “The Reformed Broker” and the host of CNBC’s “The Halftime Report.”

What types of clients does Ritholtz Wealth Management serve?

In general, Ritholtz Wealth Management focuses on serving individuals and high-net-worth individuals. Trusts, estates, charitable organizations and pension and profit-sharing plans are also clients of Ritholtz. The firm also helps manage corporate retirement plans and 403(b) plans.

The minimum account balance required for Ritholtz’s comprehensive portfolio management services is $750,000. However, the company does offer a robo-advisor platform, Liftoff, that is provided by Betterment for investors who cannot meet that minimum threshold. The minimum account size for a Liftoff account is negotiable.

Services offered by Ritholtz Wealth Management

Ritholtz focuses on portfolio management while also offering financial planning and consulting as part of its services. The firm also offers assistance with company retirement plans and institutional asset management.

Discretionary portfolio management is done on a personalized basis. Portfolios are based on core asset allocation models and tactical models, with adjustments made for individual client goals. Portfolio rebalancing can be done regularly.

Additionally, you can access the company’s robo-advisor, which features more generalized investing advice and doesn’t come with the same level of individualization that a client would receive with the firm’s portfolio management service.

Here’s a full list of services you can expect to see offered by Ritholtz:

  • Investment advisory services
  • Financial planning and consulting
  • Trust management
  • Estate management
  • Company retirement plan consulting
  • 403(b) plan management
  • Institutional asset management

How Ritholtz Wealth Management invests your money

Ritholtz offers a personalized approach to portfolio management for clients. It meets with its clients to understand their goals, risk tolerance and other relevant items. Using that information, an advisor then comes up with a recommended investment approach.

In general, the firm focuses on capital preservation and risk management when investing. Ritholtz uses what it terms a “core asset allocation model” that includes institutional share class mutual funds and exchange traded funds (ETFs). The firm also has what it calls a “tactical model portfolio” that it uses to complement other models. However, because the management is individualized, Ritholtz will also use other strategic asset allocation models that might employ fixed-income, all-equity or other approaches that are designed to help meet client goals.

The firm commonly uses the following investments in client portfolios:

  • ETFs
  • Mutual funds
  • Individual stocks
  • Individual bonds
  • Other securities

Clients who use the firm’s automatic management platform, Liftoff, will receive more generalized investment advice compared to the personalized advice provided through Ritholtz’s portfolio management services.

Fees Ritholtz Wealth Management charges for its services

Ritholtz charges fees based on a percentage of assets under management for its comprehensive portfolio management services. Fees are charged quarterly on a pro-rata, annualized basis. Here is the firm’s standard fee schedule:

Assets Under Management Maximum Annual Percentage of Assets Charged
$750,000-$1,999,999 1.25%
$2,000,000-$2,999,999 1.00%
$3,000,000-$4,999,999 0.75%
$5,000,000-$9,999,999 0.60%
10,000,000-$20,000,000 0.50%
More than $20,000,000 0.35%

The firm also has a loyalty program, called Milestone Rewards, that offers a discount of 16% on management fees once a client has been with the firm for three years.

For Liftoff, the automated advisory service, the firm charges an annual fee of up to 0.40% of assets under management. Retirement plan consulting fees won’t exceed 1.00%, though it’s important to note that this fee estimate doesn’t include fees charged by custodians or other administrators where assets are held.

Ritholtz doesn’t participate in wrap fee programs, which is when a firm bundles a variety of services under one flat fee, and it doesn’t sell commissionable securities or accept performance-based fees.

Ritholtz Wealth Management highlights

  • One of the top 300 advisors according to the Financial Times: Every year, the Financial Times compiles a list of the top 300 RIAs in the U.S. Ritholtz has been included on this list multiple times since its founding less than a decade ago.
  • Goal-based investment planning based on individual needs: While the firm relies on some model portfolios to create the basis for investment management, Ritholtz personalizes its approach based on each client’s goals.
  • No disciplinary disclosures: The firm has a clean record, and reports zero legal, civil or criminal disclosures in it’s SEC filing.
  • A number of credentialed professionals on staff: The directors of different services at Ritholtz and many of its advisors have earned industry-recognized advanced certifications, such as the certified financial planner (CFP), chartered financial analyst (CFA) and accredited investment fiduciary (AIF) designations.
  • Assistance setting up and managing employer retirement plans: If you’re a business owner and want help setting up a retirement plan, Ritholtz offers plan consulting. The firm can help establish, manage and monitor retirement plans.

Ritholtz Wealth Management downsides

  • High minimum investment requirement: For those looking for personalized portfolio management, the firm requires a minimum investment of $750,000. This might be out of reach for some consumers, especially those who are just starting out.
  • Top fee rate slightly above industry average: The maximum annual rate charged by Ritholtz for portfolio management is 1.25% of assets, which is slightly higher than the average industry fee of 1.17%. However, Ritholtz Wealth Management’s fees do drop as the amount of assets under management rises.
  • Liftoff is managed by Betterment, which has lower fees: Liftoff, the automated investment service offered by Ritholtz, is ultimately managed by the online investment company Betterment. If you want a robo-advisor, it might make sense to just go straight to Betterment, which offers basic investment advice for a lower fee of 0.25%. Consider comparing the two services before making a decision.

Ritholtz Wealth Management disciplinary disclosures

Ritholtz has no disciplinary disclosures to report. This means that it has a clean record with no prior legal or regulatory issues on its record.

Firms that register with the SEC must report any criminal charges, regulatory actions or legal actions like liens or civil judgments against them. These are called disclosures and must be listed on a firm’s Form ADV filed with the SEC.

Ritholtz Wealth Management onboarding process

To get started, Ritholtz offers a form on its website that you can fill out to get more information about the firm and provide the firm with details about yourself. After you submit the form, an advisor will reach out to schedule a time to speak. The form requests information such as:

  • Your name
  • Email address
  • Phone number
  • ZIP code
  • Whether you’ve worked as a financial advisor
  • Your level of familiarity with the Ritholtz philosophy
  • Level of investable assets
  • How you heard about the firm
  • Preferred method of contact

Your advisor will try to meet with you in person to get started, or at least talk to you over the phone. This will give you an opportunity to share your goals and to make recommendations.

After you’re onboarded, your portfolio will be reviewed at least quarterly.

Is Ritholtz Wealth Management right for you?

Ritholtz Wealth Management is most likely to benefit high-net-worth individuals who want a more personal touch to portfolio management. Because the minimum for assets under management is $750,000, many investors with less won’t qualify to have their money managed by Ritholtz, unless they’re open to exploring the firm’s automated advisory platform, Liftoff, which offers less personalized advice.

Additionally, those with a higher amount of assets can benefit from the fact that management fees become lower as assets under management increase. For those who want individualized management and financial consulting, Ritholtz offers options that can be attractive.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Miranda Marquit

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Source: https://www.magnifymoney.com/blog/investing/ritholtz-wealth-management-review/

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