Josh Brown’s Porterhouse Bets Financial Planning Becomes Table Stakes

How would you like that cooked?

Ritholtz Wealth Management and Franklin Templeton have partnered to launch Porterhouse, a separately managed account built around stocks with momentum characteristics, including strong earnings growth and cash flow. The launch comes as much of the wealth management industry has shifted away from investment selection and toward financial planning. But Ritholtz CEO Josh Brown argues the pendulum is about to swing back, partly because artificial intelligence could make planning services table stakes (pun intended).

“There’s a flip coming, and nobody sees it,” Brown told Advisor Upside. “The next 15 years is going to be about which firms can package a comprehensive financial planning experience with portfolios that are unique and speak directly to the clients they’re attracting. And the list is going to be short.”

Fire Up the Grill

The Porterhouse SMA reflects Brown’s long-running “best stocks in the market” philosophy, a concept familiar to viewers of his recurring CNBC segments. While that approach might suggest a heavy concentration in the Magnificent Seven, Brown said exposure to those names has declined over the past year as other companies increasingly fit the strategy’s criteria. “It’s not that we don’t own any of those stocks,” he said. “It’s that there are so many other stocks in the market exhibiting more of the qualities we’re selecting for.”

• The account selectively targets market leaders in the top half of the Russell 1000 index, then moves into cash when opportunities dwindle.
• Right now, the portfolio consists largely of semiconductor, memory chip and AI buildout companies like Ciena and Amphenol. 

“These stocks are part of one big theme, but that doesn’t keep them in the strategy permanently,” Brown said. “In a rising market, we’re going to end up owning more stocks, and in a choppy market, we’ll have fewer positions.”

Pass the Steak Sauce. Brown also sees media visibility and personality-driven investing as increasingly important to gathering assets. The Porterhouse SMA is the culmination of years spent building an audience through writing, podcasts, television and social media. “It’s really hard to condition an audience to buy into your investment philosophy,” he said. “A lot of firms can’t do that. In five years, people are going to be saying, ‘It’s the portfolio. It’s the portfolio’”