This week, Michael, Kris and I traveled down to visit our new office in Philadelphia. We call it Taxsylvania and it’s the home base for RWM Tax, the wholly-owned subsidiary we created for our in-house enrolled agents and CPAs.

A while back, we asked our clients how many of them would be interested in utilizing us as their accountants and having us do tax prep and tax filing, in addition to the tax consulting we were already doing at that time. The overwhelming majority told us they would like us to offer this service. So, we listened. Bill Artzerounian and Bill Sweet were tasked with building out a full-fledged accounting practice under the Ritholtz Wealth Management umbrella and taking our wealth clients on for a complete engagement. This enabled us to better integrate the tax work that clients need with the investment side of what we do. These engagements are year-round in nature, with a pre-built calendar specifying what we’ll be executing on behalf of the clients during each season, from data collection to filing and everything in between.

It typically starts with a Q4 Tax Projection for each household, where we’ll compile our clients’ data and identify year-end tax planning opportunities and give people a preview of what to expect in the spring. By April, we’re carrying out the filing and buttoning up any loose ends that may exist. Doing this sort of work requires a ton of attention to detail - both on the part of the tax professionals as well as the financial advisors who are working with the client on all aspects of their financial lives.

In total, the team will have completed 536 tax returns for 2024, up from 478 in 2023, on behalf of 359 households. As of right now, 26% of all Ritholtz Wealth Management clients are also using the RWM Tax service. Due to the overwhelming demand for this, we’ve had to establish a waiting list as we continue to recruit, train and integrate more tax professionals into the business. This is careful, painstaking work and we’re doing it in a very high-touch way, which means the pace of bringing on new tax clients is going to be very deliberate. But we’re building, and it feels amazing to be able to offer this to the families who need our help.

The response among advisors has been incredibly positive. I can envision a scenario where the percentage of clients using us for both financial planning and tax planning goes from a quarter to a half. As new wealth clients are onboarded, they’re simultaneously signing up for tax from the jump, which is proof of the need that currently exists in the marketplace.

I want to thank our Philadelphia area advisors and RWM tax team - Bill, Bill, Dominic, Everett, Angelica and Emily for building out a service and an office the whole firm can be proud of.

If you’d like to talk to us about how we integrate planning, investing and tax into a holistic client service, you know where to go: ritholtzwealth.com 

Buy the Election, Sell the Inauguration?

Adam Parker came by to tell us why he thinks the election was a buyable event but the inauguration might be a time to lighten up, depending on how big of a year-end melt-up we get over the next six weeks.

We talk about why gross profit margins became the only thing investors care about, the recent comments from David Einhorn about this being the most expensive stock market he’s ever seen and the probability of further gains from here for the S&P 500.

Take a look at this chart, from Adam’s shop, Trivariate Research:

Adam says:

You can listen to the whole conversation on Apple or Spotify right now:

Prof G Markets

We broke down the market’s reaction to the election result on Professor Scott Galloway’s podcast this week and it was quite a conversation. It’s available as a podcast now or you can watch it on YouTube below.

Thankful

I’m thinking about how thankful I am as we head into that time of year, something I probably don’t do often enough.

And if you are thankful these days, I hope you’re telling the people around you all about it and letting them know how much you appreciate them. This is something I probably don’t do often enough either.

A message to my people this week captures the way I’m feeling right now…

Thanks so much for reading and watching our stuff. Have an amazing weekend, talk soon! - Josh