Ritholtz Wealth Management founders Barry Ritholtz and Josh Brown unveiled a succession plan Friday that will result in employee ownership of the $7.6 billion RIA, a structure designed to preserve the firm's independence and support continuity.
The transition, which has expanded the shareholder ranks to include co-founders, financial advisors and key personnel, has been in the works for a decade, the firm said. Firm ownership has expanded to 29 employees, formalizing Ritholtz's next leadership generation, according to the announcement.
The move was implemented without outside capital, cementing Ritholtz's status as one of the largest truly independent, 100% employee-owned RIAs, the 15-office firm said.
Barry Ritholtz will remain involved in supporting the firm and the investment management committee as chairman and chief investment officer. Day-to-day leadership will continue under Brown, the CEO; Michael Batnick and Kris Venne, managing partners; and president Jay Tini. Committed to maintaining its continuity and culture, the firm said it will continue to operate under its namesake brand in perpetuity.
Barry Ritholtz will continue to play a key role in shaping the firm's investment philosophy and public voice, a spokesman for the firm said via email.
For several years, the firm has expanded employee ownership, with about one to three employees becoming shareholders annually. Employee ownership is determined on an individual basis.
"I have the absolute best job on Wall Street. This succession plan secures our shared legacy on our own terms. I'm extremely proud of the firm we've built and the people who've played a role in building it," Ritholtz said in a statement.
"Expanding ownership to more of our people keeps this firm one hundred percent independent, aligned and focused on the only thing that matters — doing right by our clients," he continued. "It was very important to me that the firm would continue on into the future without changing what's special about the place as we continue to grow."
Brown added: "When we launched the firm, Barry and I were involved in day-to-day management by default. And as we've grown, we were deliberate in developing our own talent and thoughtfully recruited an amazing team. This now allows Barry to focus on his highest value work, and that's investor education, engaging with the public at live events across the country, and more."
Ritholtz noted that he tuns 65 this year and "wanted all of our clients, employees and partners to understand that we have a plan to continue forever, without private equity dollars, regardless of my age. This structure is a key part of that plan."
The move comes as private equity deals make their mark on the RIA industry. Ritholtz and Brown planned ahead rather than waiting for employees to get priced out by rising valuations, building a structure that rewards tenure and performance at the 85-person firm, with no outside capital, a spokesperson said.
Brown posted on LinkedIn: "Not everybody gets a chance to start a business with their own personal hero, but I did. What Barry has just done for our clients, employees and employee-shareholders is nothing short of miraculous. He has ensured our independence for decades into the future. My advisors will never have to look over their shoulder. My clients will never have to wonder who is actually calling the shots and whether or not we will be here for the duration.
"Every entrepreneur in this business talks about 'the culture,' the long-term vision, the importance of self-determination and empowering the people who show up to work each day. How many of them actually live it? How many are willing to commit to these things financially?"
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