josh brown ritholtz

Why Technology Cannot Replace Likability for Advisors: Josh Brown Ritholtz

It seems that financial advisors are under assault from all sides.  From industry behemoths like Vanguard, who can give away advice while capturing product fees on $100 billion in assets, to digital RIAs (formerly called robo-advisors) that spend VC cash on marketing like Philadelphia Eagles players spraying Champagne after winning the Super Bowl.

Software algorithms are being deployed by competitors large and small that claim to make advice and planning simple, fun and cheap.  Their websites boast of reducing risk, minimizing taxes and slashing fees while at the same time delivering recommendations customized for each one of their clients.  (See 4 Successful Growth Strategies from Barron’s Top Advisors)

How can real, flesh and blood human advisors compete against this online onslaught and communicate their value to investors?

The answer is by leveraging the power of social media!  That is, if you take the advice of Josh Brown, CEO and co-founder of Ritholtz Wealth Management who is both a financial advisor and a social media rock star.

Authenticity and personality are critical components to growing your social media presence, stressed Brown, who was speaking to a packed room of advisors and technology geeks at the recent T3 Advisor Conference.  Focusing on these two things is much more effective than hiring media consultants, Brown added.

Advisors should be doing everything the can to gain more attention from their clients, Brown suggested. Writing a blog is a fantastic way to do this and make yourself a part of clients’ regular reading habits.  His blog, The Reformed Broker, is read by millions of investors, traders and advisors around the world.

Brown launched his RIA in 2013 with his partner, Barry Ritholz, who is also a financial blogging guru, and they now have over $500 million in AUM. Their blogs drive a tremendous amount of inbound prospects for the firm, Brown explained.

When volatility picks up and markets get scary, clients are going to race online to look for answers. Who should they turn to? Brown asked. Their advisor’s blog or a source with questionable ethics like Zero Hedge?

This is another reason in the hundred or so good reasons for every advisor to distributing their thoughts via blogging and social media, insisted Brown, who was named by The Wall Street Journal, Barron’s and TIME Magazine as the most important person to follow on Twitter for financial information.  (See RBC Tries to Jumpstart RIA Custody Business with New Platform)

The need for high quality, original content exists on both sides of the aisle; wealth managers as well as their technology vendors.  This is why I launched a content development business alongside my consulting firm, Ezra Group, to provide thought leadership for vendors in the wealth management space.

If your firm provides software, hardware or services to banks, broker-dealers, asset managers or RIAs contact Ezra Group at for a free quote.

Technology Cannot Replace Likability

The media and conference circuits have been pumping the need for advisors to invest more into technology for years now.  Whether it is implementing their own digital advice channel, hiring a content marketing services or slapping a button on their website that says, “Click Here to Open an Account,” the message to advisors is that technology can solve all of your problems.

Except when it can’t.

“Technology cannot replace likability,” Brown emphasized. Advisors need to transmit their thoughts, opinions and personality to their clients and prospects. This cannot happen through online questionnaires, tired financial content, or mass-produced Twitter posts that show you didn’t lift a finger to try and connect with people. (See The Indispensable Advisor by Joe Duran)

Why does the social media content of every big financial brand fail to attract buzz? Brown asked.  Because their content is boring, cliched, & completely what you would expect, it’s incongruous to the way people live, like public access TV, but worse, he complained.

josh brown ritholtz













In one quote, Brown simultaneously rips into wirehouse marketers and Saturday Night Live writers!  Remember when SNL was funny?

Brown, who is the author of the books Backstage Wall Street and Clash of the Financial Pundits, quoted one of my favorite comedians when he said:

“Be so good they can’t ignore you.”
—Steve Martin, actor, comedian, musician

Ritholz Wealth tries to put the above into practice through their company goals, which are: 1) Evidence-based investing and 2) Putting the client first. It’s important to be consistent in both public and private interactions, Brown explained.  (See 4 Secrets of Successful RIA Rollups)

Weaponize Fee Compression

Along with the technology-driven pressures, advisors have also been experiencing fee compression from a number of different directions.  Digital RIAs selling advice for under 50 bps, mutual fund and ETF companies continually lowering their expenses and the trend to passive have all contributed to clients looking for their advisory bills to go down.  (See How Advisors Can Best Fight Fee Compression)

Advisors should flip the narrative on it’s head, Brown proposed. “Don’t run from fee compression, weaponize it!” he exclaimed. In other words, make the inevitable price reductions work to your advantage. Leverage them to build your business and create a competitive advantage, he offered.

After a client has been with them for three years, Ritholtz Wealth automatically reduces their fees by 15%. They do it again at the five year mark. This is to reward the client’s loyalty to their own plan. It also is and excellent way to increase client performance!  (See 5 Bold Predictions for Advisors’ Product Shelf in 2027)

Continually lowering their fees may be helping them gather assets.  Ritholz was the #4 fastest growing RIA in 2017, which was an increase from the year prior when they were #7.

The Best Advisor Blogs

A number of financial advisors who publish blogs and have built large followings were highlighted by Brown as examples to emulate.

The ETF, The Whole ETF and Nothing But the ETF

Brown has some pretty strong opinions on asset management.  While he did not come right out and say that it was dead, he implied that it’s on life support.

It’s almost impossible to implement a consistent investment management process using individual stock positions due to logistical issues, he claims.  Why is it impossible to manage individual equity positions and why should advisors only use ETFs or mutual funds?

The Reformed Broker wrote this on his blog late last year:

ETFs don’t completely fix all these issues – issues that, if left unchecked, will torpedo a relationship and cause the worst sort of behavior in a portfolio: Chasing, second-guessing, missing the forest for the trees, anchoring biases, focusing on the least important thing, falling victim to the endowment effect, buyer’s remorse, seller’s regret, etc. But they preempt a lot of them, from day one.

But ending the madness of tracking, reporting on and obsessing over single stock positions is a big part of the story. The majority of advisors have no business implementing or managing these holdings. Unless it’s for cocktail party chatter or recreation.

Jack Bogle: “The stock market is a giant distraction from the business of investing.”

Asset Management is Dead

Costs for asset management have also been trending towards zero, Brown pointed out. The extended bull market has put the market’s foot on the accelerator heading down for asset management fees.

However, if there is an extended bear market, there may be a return to things like macro, event-driven and long/short strategies and the active management community will say “We told you so!”, Brown predicted.  They will be profitable for a short time, but they can’t stop the tidal wave of low-cost options that will commoditize their business, he argued.

Don’t forget to build relationships with your clients’ children, Brown warned.  The clients you are working with now will not be the ones you will be working with 20 years from now!













The Wealth Tech Today blog is published by Craig Iskowitz, founder and CEO of Ezra Group, a boutique consulting firm that caters to banks, broker-dealers, RIA’s, asset managers and the leading vendors in the surrounding #fintech space. He can be reached at