“Please Take My Money”

You have to spend a certain amount of money as a politician to be in a national contest, to get that name recognition. What if you already start with it? — Josh Brown

Updated: great response from Barry Ritholtz — http://ritholtz.com/2017/08/howtobuildafirm/

It is amazing to me what Barry Ritholtz and Josh Brown have done with Ritholtz Wealth Management (RWM) over the past few years. I have admired Barry and his firm since I first listened to his Masters in Business podcast in the summer of 2015. I have since followed him and his firm more closely with incredibly high regard. This isn’t just a plug for RWM; it’s really a case study on the value of authenticity and arguably, a demonstration of where brands and marketing are heading. Barry appeared on this week’s episode of The Sherman Show, DoubleLine Capital’s new podcast (h/t to Zach Ullman for sharing the episode). Barry is no stranger to the public eye — he is a well-known financial media personality, often appearing on TV segments and podcast interviews. This particular episode was really an hour long lesson on how to build a company through candor and consistency.

Barry was one of the early movers in what has become an increasingly expansive financial blogging community. He was also early to podcasts, starting his Masters in Business podcast with Bloomberg in July, 2014. In my mind it’s the best podcast out there and it has literally prompted me to drop everything and listen for the past few years every Friday. He has played an instrumental role in the development of the Evidence-Based Investing (EBI) Conference through RWM’s partnership with IMN. The roster of speakers and attendees for the first few conferences speaks for itself, but this really is the first conference of its kind to hone in on the notion of evidence-based investing. Barry’s collective team at RWM is really the best of the financial blogging community. Don’t take my word for it — they’re regularly placed at the top of any list of the top financial writers. Josh Brown is The Reformed Broker. Michael Batnick is The Irrelevant Investor. Ben Carlson shares A Wealth of Common Sense. Tony Isola has great posts as well at A Teachable Moment. Kris Venne and Bill Sweet are also actively engaging on Twitter.

Here’s what’s so cool about our model. We are only talking to people who are reading our stuff, for the most part. Barry has been blogging since 1998. I’m 9 years. Michael Batnick is 3–4 years. Ben Carlson is 3–4 years. We’ve got this great relationship with our readers and this trust, to your point, that’s been built up over years. — Josh Brown

If you want to know what Barry and team are reading, you can have that sent to your inbox every morning. Barry, Josh, Ben, and Michael blog every single day. They are active on Twitter. They are regularly on interviews and podcasts. They publish valuable insights, research, and links on a daily basis. I have learned a tremendous amount over the past few years from all of them. This consistent, high-quality content is incredibly informative, but it also supplements the trust they have built. And that trust compounds. There is a flywheel effect that occurs from the myriad of channels through which Barry, Josh, and team share their work and thoughts. It ultimately has lead to a phenomenon where prospective investors say:

“I know who this guy is. I know what his philosophy is. Please take my money.”

When you consistently show who you are, what you’re interested in, what you care about, and what you stand for on a daily basis, you engender trust. You can certainly attempt to do that with an end goal in mind, but as Buffett says, “it takes 20 years to build a reputation and five minutes to ruin it.” For these guys at RWM, it is just routine, unwavering authenticity. Every day I receive their blogs in my inbox. Every morning I get Ritholtz’s Morning Reads from Bloomberg. Every Friday afternoon I get Barry’s latest podcast in my podcast app. It’s just routine at this point. I have made it a part of my daily and weekly agenda because I place such high value on Barry and team’s work. Often times it’s also entertaining and pretty funny.

This is the moment that we’re in right now, by the way. Because financial services was always sold on the basis of the reputation of the firm. And it’s not that that’s not important anymore. It’s that personality…so like social media is a great example. People don’t follow brands, they follow people. I didn’t look, but I’m pretty sure @TruthGundlach has more Twitter followers than @DLineCap. And he’s been tweeting for two weeks. — Josh Brown

It’s not surprising at all to me that RWM was named one of the fastest growing financial advisory firms in 2016, according to Financial Advisor Magazine. They have roughly $500M in AUM after ~ four years.

I don’t know what portion of expenses are allocated towards marketing the firm, but my guess is it’s slim. The work that the entire team does on a daily basis commands a respect and a trust. After a long enough period of time, you know exactly who makes up the firm and what they stand for. The work speaks for itself. There is a lesson here that expands well beyond the realm financial services. By demonstrating your identity and providing value to others on a regular basis with no expectation of something in return, you build a trust and respect which compounds over time. In the case of the team mentioned above, they have built a community of loyal followers (and likely friends, in many cases). The ultimate cost of acquiring a customer can be driven down dramatically by emulating a process similar to that of RWM.

Simply put, by candidly showing who you are, what you care about, and what you believe on a consistent basis, your customers find you. This team has figured that out. Barry often recalls a reality of the trading world that “right plus early equals wrong.” While that may be characteristic for traders, Barry, Josh, and team were both right and early with regard to their consistency, honesty, and candor in public forums. Their precociousness has given them more time to let their reputations and trust compound. The results are speaking for themselves. I don’t expect that to change any time soon.