INVESTMENT ADVISOR AND FINANCIAL PLANNER, RITHOLTZ WEALTH MANAGEMENT
HOW DID YOU GET INTO FINANCIAL SERVICES?
It was a mix of luck and happenstance. I decided during my sophomore year in undergrad to switch majors, from dance to business. Of all the specializations in business school, the finance classes were most interesting to me. I originally thought I wanted to be an investment banker, but instead I was hired into wealth management at a brokerage firm. I’ve spent my entire career working with high-net-worth investors and small institutions such as retirement plans. Back in the early aughts, wealth management or 'retail' was not a desired career by most finance undergrads. After the financial crisis, however, retail was seen as a stable, high-earning career with a chance for work-life balance. I’m eternally grateful for the way things turned out for me.
WHAT BROUGHT YOU TO JOIN RITHOLTZ WEALTH?
Many strings have been pulling me towards the firm since it was founded six years ago. Do you want to know something crazy? When I announced the last day at my prior firm on Twitter, several people correctly guessed where I was going. What made sense to me made sense to complete strangers following me on social media. I knew Barry [Ritholtz] almost 15 years ago when he was a client at a brokerage firm. I ‘met’ Josh [Brown] by following him on Twitter and later meeting in real life. Josh and I were on the Investment News 40 Under 40 list together in 2015. I participated in the firm’s first Evidence Based Investing conference in November 2016, where I met Ben Carlson, who moderated the panel. Last summer, I met Kris Venne at EBI West, and it all started to come together. Not only were they building an investment advice business, but it was centered around financial planning. This brought together my two disciplines as a practitioner; investing and financial planning. Earlier this spring, Josh posted a blog about the firm’s failure to hire female advisors. That was the final nudge I needed to jump.
WHAT ROLE WILL YOU PLAY THERE?
I’m excited that this role frees me up to spend more time with clients. I’ll be assisting them with financial plans and investment strategies. The firm is built of a variety of specialists in areas like insurance, tax planning, trust and estate, and retirement planning. We have so many resources to do high quality financial planning. I’m a huge believer that planning needs to be the core of our relationship with clients. Planning drives the investment decisions.
I am be a member of the investment committee and look forward to continuing investment research. I’ll also be writing and blogging more. A few people have already asked if I’ll be writing a book like many of my co-workers. I’m not sure, but I’m open to the idea.
I will also field media inquiries and become a second spokesperson for the firm. This is a natural fit with the media relationships I’ve forged over the years on social media. I look forward to communicating our message to the public through all forms of media.
WHAT OPPORTUNITIES DO YOU SEE WITH RITHOLTZ?
At Ritholtz, we now have a sizeable team of talent. The four founders, Barry, Josh, Kris, and Michael all bring different skillsets to the firm. Barry is a long-term strategist with a large, loyal readership. Josh is a social media powerhouse and a brilliant communicator. Michael is an investment research phenom and a newly minted best-selling author. Kris brought it all together with financial planning and the knowledge of how a world-class wealth management firm should be run. As they’ve grown, they continue to add more skills. Each one of my co-workers is a specialist at the top of their field. Combine that with a client and employee-centric culture, and we’ve got something very special. We are building a world-class investment advisory firm our own way. I have to pinch myself sometimes to remind me that this is real and not a dream.
OVER THE YEARS, THE WAY THAT ADVICE IS BEING DELIVERED HAS CHANGED DRAMATICALLY. HOW DO YOU APPROACH IT?
It’s how our clients find us. The use of 'new media' including social media, blogging, podcasts and video is dramatically changing the way an RIA firm can attract clients. Ritholtz may be the first firm solely dedicated to utilizing this method to build and grow an RIA. Our approach shows that firms need to be 'all in' on media in order for this to be a successful strategy. This is a business model that was unimaginable 10 years ago, and at risk of using a tired term, it is disrupting our industry.
It’s how we communicate with our clients. When I started at a brokerage firm about 15 years ago, advisors were hesitant to adopt email. This was more than an issue with the learning curve around technology, it was also driven by fear about written communication as evidence in a client arbitration complaint. I think brokerage firms are still built around a model that discourages such 'evidence'. This is why they are painfully slow to allow their brokers to use social media. In the age of 24/7 news in the pocket of all clients, it’s crucial to have frequent communication with clients of all forms; in person, on the phone, email, social media, etc.
How social media works for me. Twitter is my go-to for news and conversation with some of the smartest people in finance. I can’t tell you how many people I have met through Twitter. Reporters are there, so it leads to opportunities to contribute to news stories. I’ve gotten most of my speaking engagement through Twitter. You could say that my job at Ritholtz is a result of tweeting. LinkedIn is my online rolodex that I never need to update. It’s an excellent way to keep in contact with professionals in a world where people change jobs frequently.
WHAT HAVE YOU LEARNED ABOUT WORKING WITH MILLENNIALS?
Based on the millennials I’ve worked with, I find them less likely to check their account balances between monthly statements. They almost never ask about performance and accept that market fluctuations are a fact of life. Perhaps this is because they have a longer time horizon. They’ve also experienced two major bear markets during the first decade of their working lives. They are focused on saving, paying off debt, securing the right insurance, taking care of young families while both working full-time jobs. They are less likely to want to meet in person or drive downtown to my office. They are fine with phone calls and screen sharing meetings. They never check their voicemail and their email is full of junk, so send them a text!
WHAT KEY THINGS SHOULD ADVISORS BE DOING TO SERVE THEIR CLIENTS?
Advisory relationships are built on trust. At Ritholtz, we pre-build a lot of that trust through a tidal wave of content, explaining exactly what we do for clients. We also explain what we don’t do – stock picking, market timing, day trading, etc. This allows potential clients to approach us two or three steps ahead of where they might be with a traditional firm. Once they become a client, we lead with a comprehensive financial plan. We take the time to learn what matters most to our clients and help them determine their goals. The investment solutions are a natural progression from the financial plan. Trust cannot be created, it must be earned. This means advisors have to really take an interest in their client's lives. Ask them about their family, their pets, their hobbies. Clients want to be heard by their advisors, not shuffled through the formalities of an annual review.
WHAT IS YOUR TAKE ON ACTIVE VERSUS PASSIVE INVESTING?
The active passive debate is not really about active or passive anymore. To borrow a phrase from Jack Bogle – it’s about high cost investing versus low cost investing, and low-cost investing is winning. I’m not even sure what the definition of active is anymore. There’s been an avalanche of index creation in the 'passive' space, but are these new products really passive, or are they rules-based ways of slicing and dicing the market into a different flavor? Is a quantitative strategy considered active, or is it rules-based? Perhaps we need additional terms to classify investing styles today. I question whether or not fundamental based stock picking will exist in 10 to 20 years.
IS 'SMART BETA' JUST A FAD?
Smart beta is a clever marketing term for factor based investing, which has been around for more than 30 years. The small cap premium was first written about in the early 1980’s. In 1992, Eugene Fama and Ken French published their three-factor model paper on the size and value premiums. Others have argued that momentum, low-volatility, dividends, and high-quality are also factors. Factor based investing is simply any strategy that is not a market-cap weighted portfolio. Asset management marketers were brilliant to coin the term 'smart beta' to sell products, but it’s just a fancy term for factor investing.
WHAT ADVICE DO YOU HAVE FOR WOMEN WHO WANT TO BREAK INTO FINANCIAL SERVICES?
Please consider a career in financial services! We need more women. Women make great advisors because we tend to be good listeners and empathizers. Women also live longer than men, which means women a poised to control more financial assets than men in the near future. These women may not connect with traditional, male advisors. I’ve been doing this for 15 years, and the percentage of women advisors, women CFPs, and women CFAs hasn’t budged. We need to get the word out to young women. This is a rewarding career with good pay and the potential for flexibility and a healthy work-life balance.
WHAT DO YOU SEE FOR THE FUTURE OF THE INDUSTRY?
I cannot wait for the day that a client holds up her cell phone to mine and all of her financial data immediately transfers to mine. The financial planning software will instantly analyze her savings and spending habits, balance sheet, taxes, insurance, and provide suggestions. A notification will pop up on her phone prompting her to authorize transfer of her accounts to me with one click. Technology has already revolutionized how we work with clients, and the pace of innovation is picking up speed. Ten years ago, I was doing financial plans and rebalancing portfolios in an excel spreadsheet. There’s still a lot of room for technology to create efficiencies in how we advise clients. Whoever solves the problem of the need for 1,000 different logins and passwords will become a multi-billionaire.
WHAT DO YOU DO FOR FUN?
I love to be outdoors. I deep sea fish in the Gulf of Mexico with my Dad. I’m learning to sail on Lake Ponchartrain. I used to water ski more often, and I hope to teach my son in a few years. My son turned one in February, and I’m excited to see what he enjoys doing as he grows. I think it will be fun to experience childhood again as a parent. I wish I had more time to read, but my life is very full right now. It’s a wonderful thing.
Read more about duQuesnay's experience on her new blog, The Belle Curve.
Look out for an in-depth profile with the Ritholtz team in the September issue of our newly-launched RIA magazine.