The other day, we had a situation where a client was issuing orders that didn’t sound right to the admin whom he was speaking with. We don’t allow money to move without a verbal confirmation from clients for their own protection, which is how we picked up on the fact that something might be wrong. Upon our attempt to confirm the client’s instructions, his acknowledgment of what he was asking us to do was inconsistent.
As clients age into the demographic during which cognitive decline becomes a risk, there are many responsibilities an investment advisory firm has to protect them. My quick-thinking Director of Client Operations consulted with this client’s family, whom we had on a Trusted Contact list to call for exactly this potential issue. We asked his adult child and siblings to go check in on him in person and see what was going on after sharing a record of our communications with them. It turned out that the client was not fully aware of what he was doing and rescinded these instructions upon becoming lucid about the situation. What could have been a disastrous mistake was averted by the advisors and admins who truly know this client personally and understand his financial plans.
This is what it takes to deliver holistic wealth management and serve investors and their families as a fiduciary advisor. Not technology. Not more software. Not a killer ETF allocation. It takes knowing your clients, caring about their wellbeing and having systems in place to catch potentially dangerous mishaps. It takes talent. Human capital. We’re blessed as a firm to be overflowing with this sort of talent and human capital. In the coming years, we will be bringing on even more of it.
This year, we’ve made a number of momentous additions and promotions within the firm that I am very proud to share with you.
One of my primary goals going into 2020 was the shoring up of our critically important operations and compliance systems. I discussed this with my partners at our annual year-end retreat and we were all in agreement that the firm had grown too large and complex to put this initiative on hold for another year.
We began our search for a Chief Compliance Officer to come in and build all of these systems internally after having spent the first six years of our existence working with an outside compliance firm on a consulting basis. It was time to add a CCO to our Executive Committee and take full ownership in-house. We got extremely lucky when Patricia Hatzfeld applied for the job.
Patricia came to us after a fourteen year career at FINRA, having risen to the level of Senior Director, Member Supervision. Patricia came in with expertise on everything from cybersecurity to accounting to risk detection. In her first six months as CCO of Ritholtz Wealth Management, she’s rebuilt our Written Supervisory Procedures, overhauled our entire oversight mechanism and took part in the creation and implementation of many systems designed to protect clients, advisors and the firm. She’s made her mark on all aspects of what we do, from content creation and social media to asset allocation and financial planning. Patricia came in as senior leadership for the firm on day one and quickly set the priorities for what we needed to fix, what needed to be created from scratch and what systems had to be in place in order to monitor it all. This is all laying the groundwork for the next decade of our continued expansion.
We’re always on the lookout for new advisory talent. Every month roughly one hundred new families inquire about becoming clients, but my partner Kris Venne has always been focused on what he calls the teacher-student ratio. Without capable, caring and dedicated financial planners on the front line, we wouldn’t be able to onboard as many households each year as we have. We were very fortunate to have been introduced to Emily Johnson, an advisor in Hilton Head, South Carolina, this winter. She’s become the first employee we’ve ever hired remotely without having met her in person. Emily spent weeks on Zoom calls with almost a dozen different people here at the firm to learn more about us and so that we could get to know her. Every single one of my employees who’d gotten off of a call with her immediately slacked me afterward saying something to the effect of “You have to hire her.”
Emily had been running her own RIA for a decade and had a loyal client base, predominantly made up of people in South Carolina where she’s based. But running a practice alone can be lonely! Not to mention the fact that you’re forced to spend a lot of time on things that are not directly related to serving clients. Emily is both a Certified Financial Planner (CFP) and a Certified Divorce Financial Analyst (CDFA). She’s got this specific area of expertise that will be a resource for all of our advisors nationwide to draw upon. When the pandemic ends and travel possibilities reopen, priority one is getting her up to New York (or me to SC) to spend some time in person. In the meanwhile, she’s been training with Kris and several of our advisors and investment committee staff to bring what we do to her current and future clients. It’s been going incredibly well so far. I’ve personally been blown away by my staff’s ability to onboard Emily and her clients in remote working conditions. That’s talent.
Last but definitely not least, we made a field promotion this summer that, in hindsight, had probably been long overdue. Many of you are familiar with Nick Maggiulli‘s outstanding work at his blog, Of Dollars and Data. What you may not know is that he’s a machine. Whether it’s Patricia in Compliance, me in blogs and social media, Michael and Ben on the investment committee, Kris on client service, Duncan on audio / video or Tadas in investor education, every single project we throw at him gets done as though there were a team of elves sneaking in overnight like in the fairy tale. He’s ridiculous. And if he doesn’t know how to do something, it rarely takes him more than a day to research solutions, propose them and execute. I’ve never seen anything like it.
Nick’s been supplying us with information about how to improve, streamline and focus our efforts since he began at the firm a couple of years ago, then as the head of data analytics. But “data analytics” doesn’t even come close to describing the enormous breadth of his portfolio and responsibilities. There’s not a cog or a wheel or a lever or a pulley within RWM that Nick’s fingerprints aren’t on. And so with him having become a de facto Chief Operations Officer long ago, I am very proud to announce that last month we made it official. Nick Maggiulli is now the COO of Ritholtz Wealth.
Nick is currently leading a task force (Operation: Threat Level Midnight) to turn our client onboarding process into a miraculously easy experience for all parties involved. This is critical for our ability to operate as a high-capacity, modern wealth management firm. There are all sorts of intricacies involved – the two-way exchange of sensitive data and personal information, multiple software providers, the exchange of documents, connective tissue between custodian banks and technology vendors, compliance protocols and more. I couldn’t think of a better person to solve this multifaceted challenge and bring us into the 2020’s decade with maximum productivity and efficiency. Nick is the pure embodiment of the term human capital. His wildly popular blog is just the cherry on top.
We’ve been working on many more initiatives too numerous to mention here. Okay, one or two. This spring we brought on Fidelity as our third brokerage custodian for client accounts. That took an enormous effort on the part of the admin staff, trading staff and investment committee. There are a lot of t’s to cross when you’re trying to replicate the exact same services and asset management strategies you provide at Schwab and TD at a new custody firm. It’s another system to learn and incorporate into the existing workflow. But we got it done. Remotely. Big talent involved.
We’ve also turned all client communications over to Tadas Viskanta, our director of investor education, who is consistently messaging and updating over a thousand households about everything going on within the firm, no matter who their point of contact is or where they’re located. We’ve gone from a collection of advisory practices under a collective banner to a unified organization where the client experience is standardized and the relationships are personalized. Tadas is the best curator and distributor of financial content in the business and has been for a long time. Utilizing this talent of his for the benefit of clients and advisors has been crucial in the environment we’re in.
I’ll end by saying that nothing we’ve accomplished this year would have been possible without the people I’ve lauded above. Credit where credit is due. I know I’ve used the term “fortunate” a lot in this post, but how else can Barry and I feel when surrounded by colleagues such as these?