It’s not a funnel, it’s a filter

We at Marcellus have great admiration for the team at Ritholtz Wealth Management, an American financial advisory firm, primarily because of their ability to articulate their philosophy and approach through their prolific writing of numerous blogs and books. We found this article by their CEO resonate with us, as much like them we believe our writings have helped attract the right kind of talent and clientele as well.

“One of the most crucial signs we see in a potential hire or a prospective client is whether or not they’re familiar with our public-facing work. The content, the message, the brand, the personalities. We want people who get it and want to be a part of it.

I have dozens of people working here who initially came to us and said “Whatever you guys need, I will come in and do it.” That attitude and affinity for the brand is a prerequisite for people who are going to be client-facing advisors. We’ve been writing and speaking for fifteen years on the blogs, on television, on podcasts, at conferences, etc. The advisors who come to us as fans of the message go on to become superstars once they get here. They plug right in to the culture and become evangelists because they believed in it before they were a part of it. They’re grateful for the opportunity to be one of us. That enthusiasm and familiarity enables them to make an immediate impact with our clients on day one.

…When it comes to clients, the filter versus funnel idea becomes even more important. What good is going to all that trouble to surround yourself with A players if you’re going to allow anyone with money to walk in and contaminate the ecosystem? It took me a long time to understand this and internalize it. As a retail broker, we were trained to take money from anyone and to sell people whatever they said they were looking for. I think of the brokerage business as a convenience store. “In and out quickly, whatever you need we have it, thank you come again.” On the advisory side of the business, it cannot work that way. You have to be crystal clear about what you’re offering. My partner Kris uses the analogy of running a five star Italian restaurant and having someone walk in and order a hamburger. “We can make a burger, sure, unfortunately that’s not what we do.”

“But you have ground beef, yes?”

“Of course we do – for the bolognese sauce – but we don’t make burgers. We make amazing Italian food. There’s a burger place on the corner if that’s what you want.” It takes a certain level of maturity to understand why you have to say no. Regardless of passing on the revenue. Regardless of hurting someone’s feelings. You have to insist upon only serving the customers who are there for what you offer.

If you’re not filtering out the potential customers who are looking for something other than what you do, the chaos this creates internally will make it impossible to focus on the customers who are there for the right reason. You’ll end up answering nonsensical questions that no one has time for. Bending your own internal processes to tend to exceptions. Distracting your employees with workarounds and retrofits and all sorts of other time-wasting activities. If you have a few misfit clients, it becomes an impediment to managing the business efficiently. If everyone is a misfit or a one-off, you’re going to fail. Filtering potential clients so that you only take on people you can actually help – people who want to be helped – isn’t a luxury. It’s mission critical.”

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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.