Practical analysis for investment professionals
31 March 2016

Social Media: The Cornerstone of Financial Firms in the 21st Century

Few investment firms have leveraged social media as effectively as Ritholtz Wealth Management.

The firm’s growth is striking, and the main driver has been its social media presence, CEO Josh Brown explained at the 2016 CFA Institute Wealth Management Conference in Minneapolis. With the investment industry experiencing rapid change, Brown emphasized how critical it is that finance professionals embrace the new medium and offered several essential pointers.

“It has never been more important to be able to differentiate yourself as a financial adviser than it is right now,” Brown explained. “And social is how we do it. It’s how anyone can do it, if they want to put in the time and the effort.”

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To make his case, Brown highlighted the success of Ritholtz Wealth Management and demonstrated how social media was an essential adjunct in achieving it. Whether through Brown’s own blog, The Reformed Broker, or those of his colleagues, like The Big Picture by Barry Ritholtz, what it comes down to, he said, is “You put your opinion out there, and like-minded people find you.”

The results speak for themselves.

Ritholtz Wealth Management launched in September 2013 with four people and $90 million in assets under management (AUM). That $90 million has now grown to over $300 million and the staff to 14.

That AUM has come largely through the blogs and social media — and so has the staff.

“We don’t use recruiters and we don’t run employment ads,” Brown explained. Everyone who works at Ritholtz Wealth Management came through the blogs and social media after reading what they had to say and wanting to be a part of it.

“We’re saying what we actually think, not what we think people want to hear,” Brown said, emphasizing the importance of both being honest and being yourself in social media success.

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Why Social Media?

What makes embracing social media so essential today?

“The thing about our industry right now is that everything is in flux,” Brown explained. “Every dollar in assets is essentially up for grabs.”

To put it in perspective, Brown outlined some startling statistics. The wealth management industry is in the midst of an enormous generational wealth transfer. About $30 trillion is being passed on from one generation to the next. And “66 percent of the kids who inherit their parents’ money end up leaving their incumbent adviser,” he said.

Where will these kids find their new adviser? Brown is betting on online. So, any adviser who wants to stay in business needs to develop a web and social media presence and engage with these potential clients.

“While the opportunity is massive, very few firms are positioned to grab their share,” Brown said. He offered the following advice to those looking to carve out their space.

Don’t Delegate

The key to mastering social media is developing a distinctive voice. That’s not something that somebody else can do for you. “Don’t spend any money on those consultants,” Brown said. “Forget about those people.”

And don’t defer to other staff members, either. “Try to do this yourself,” Brown continued. “Don’t give it to the interns. Try to be involved.”

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Don’t Take Shortcuts

There can be a temptation to pay for followers or otherwise grow your audience artificially. Don’t do it. Engaged and thoughtful readers and followers are much more valuable than artificially inflated numbers. Organic traffic is where you build your AUM. “Don’t pay people to get your Twitter followers,” Brown warned. “I’ve seen that backfire.”

There Is No Right Platform or Platform Mix

Success on social media does not come down to any one blueprint. The goal is to build your community, which can be done with a number of tools and combinations. Some people do it through Twitter, others with Facebook. Different platforms bring different benefits. What’s most important is that you are on social media and using it well, not which platform you are on. “Don’t get caught up in the debate about which is better,” Brown advised. “You’ll be better on some than others.”

Keep It Civil

You will encounter critics and trolls. Don’t take it personally, and don’t let yourself get dragged in. It will not help you or your business. “No fighting. No wars. No responses to people who say nasty things,” Brown said. “Someone’s going to not like you. It’s really important that you don’t respond. You have to be above it.”

Don’t Give Up

Don’t expect to see results immediately — and appreciate that there is a learning curve. “Reasonable expectations are key,” according to Brown. Be prepared to make mistakes and embarrass yourself as you try to find and craft your voice. Remember: “The only thing that works in social is being yourself.”

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And Have Fun

Learning a new medium, mastering new technology, finding a voice, and gaining an audience (and staff) online is a challenging endeavor. So, too, is the nuts and bolts of managing portfolios. But Brown much prefers the new way of doing business to the old.

“I’m somebody that spent a decade cold-calling high-net-worth individuals and begging them to spend just a few minutes talking with me,” he explained. “This is better. This is way more fun.”

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©

Key Takeaways

  1. To effectively compete in today’s marketplace, advisers need to develop a web and social media presence.
  2. Advisers shouldn’t take shortcuts on social media by paying for followers or hiring consultants to manage their accounts.
  3. When it comes to social media, advisers should be authentic, honest, and civil.
  4. Advisers should use whatever social media platform or platform combination that works best for them.


Building a 21st Century Advisory Firm
Josh Brown

Download the full transcript.

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About the Author(s)
Paul McCaffrey

Paul McCaffrey was formerly the editor of Enterprising Investor at CFA Institute. Prior to that role, he served as an editor at the H.W. Wilson Company. His writing has appeared in Financial Planning and On Wall Street, among other publications. He is a graduate of Vassar College and the Craig Newmark Graduate School of Journalism at CUNY.

9 thoughts on “Social Media: The Cornerstone of Financial Firms in the 21st Century”

  1. We all love RIABiz and the tips on being authentic. I’m interested in what’s in their digital toolkit that frees them from the tyranny of button pushing social media jockey-dom to have the time to be a genuine thought leader.

  2. Andrew Mylott says:

    There is at least one significant regulatory pitfall here, and that is the SEC rule prohibiting client testimonials in adviser advertising. An adviser placing a static sample of favorable client comments on its website is understandably frowned upon due to the potential for abuse. But there is no reason in this day and age that advisers’ compliance personnel should be expected to police the flow of unsolicited, arms-length statements on social media. The SEC should rectify this impediment.

  3. Brian says:

    I know of Josh Brown from CNBC. Good for him, but too not acknowledge that is disingenuous. Social media platforms are available to all and therefore, not as valuable as traditional media.

  4. Rojer Martin says:

    Hi Paul, you truly explained here the beauty of social media and how to use it for businesses with proper ethical practices. It is true too that every social media platform has its own benefits no one can argue on which one is better.
    It really depends on the industry you want to promote. Thanks for sharing this.

    1. Paul McCaffrey says:

      Thank you for reading Roger. And for the kind words.

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