YouSaid · the spoken record

Peter Mallouk

lines on the record: 173
first: 2019-12-13
most recent: 2019-12-13
sittings or episodes: 1
sources: podcast

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“Seven years ago. Right. So it's allowed us to become very competitive. And one of the fastest growing parts of our practice is that very, very, very large family.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“You care about the 40% of state tax. You care about the 12% state tax. You care about how your kids are going to get the money and is it going to screw them up? You care about asset protection. And these are very sophisticated concepts that most of the RA space is not equipped to handle. And we have, I think, a very substantive group within Creative Planning that's used to dealing with hundreds of those families. And I think we bring a very unique perspective there. And I think what's interesting is when they're comparing, it's always between us and, say, a place like a JP Morgan or a Goldman Sachs. And the RIA story resonates so much, independent, and we don't have our own products. But we also practice tax and law, and they don't. And we're used to dealing with folks your size. And that's not something I could say.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Is where we really try today to only take on people that have 20 million, 25 million, or more, like a few this week that came on had 100 million or more. And there's a group that's probably our longest running group as a whole within the firm that's used to dealing with those kind of clients. There is a lot more sophistication needed there, not necessarily for a large part of the portfolio, but for a small part of the portfolio and from a legal and tax perspective. If you've got somebody who's got $150 million, all this debate we've been having about our stock's going to do better than bonds and do small, do better than large? And will emerging markets do better than stocks? And will private equity do better? These are what I call 1% conversations. We're going to move the money. You're going to make 1% more or less. If you've got $150 billion, you really don't care about that.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“But they would wind up maybe with the wrong advisors because the advisor working with somebody who has $12 million at that point would be our most sophisticated advisors and they'd be working with somebody who had 50. So we created a merging wealth group to deal with that and opened the doors to people who had less than half a million and it exploded. I mean, that group has thousands of clients, about 20 employees. And interestingly has become one of the biggest lead sources for our ultra affluent practice.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“So we used to just call everything private wealth, and you went through the process. We built a portfolio. Our typical client was the multimillionaire next door. The doctor or dentist or lawyer that worked their entire career, the business owner or a guy who made money in real estate, they put together a million dollars or $12 million and they became a client of creative planning. About four years ago, we segmented out an emerging wealth group. We had so many family members of clients. And we didn't really have a great way to handle it, but it's very difficult to sit with somebody who's got $7 million and they've got three kids and their kids are all 28 and say, we're not going to work with your kids. Right.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“But institutional, as I think of it like you do, is endowments and universities and things like that, that space we entered about five years ago and is by far the smallest part of our business. And I would just take the foreign case space and make it even harder. A lot more decision makers and a lot lower fees. And you're seeing a very big migration away from alternatives towards low cost passive investing complemented with certain alternatives.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“So, this is the smallest part. People that have family offices we manage a lot of money for those folks, private family offices.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Those days are overnight. That's gone. I think on the private side, that's gone. It was very, very common where everyone just had their money with their buddy or their neighbor or whatever. That stuff's gone. And I think that's another thing. That 0809 and Madoff and all that just got rid of that. And people are getting much, much more serious about who their advisor is.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a huge win for everybody. Most of the time, when we're talking to somebody about a 401k, we're going to get that 401k. The issue is 40ks are much harder than the private side because private side, somebody walks in and they're going to make a decision with the 401k. Somebody walks in and they're the owner, but they've got a, there's a CFO, there's HR, you're talking to HR. I mean, it's a process and it should be a process. It's a big decision for the business.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“That should be appreciably less than 1%. And most plans are one and a half plus, and so it's kind of like. Very easy. You”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Like even a startup plan for us might pay a fee of 30 basis points. Okay. I mean, like, and you're talking about someone starting with zero assets, now they still have their... When you look at a 41k plan, there's administration costs. You have to pay for the funds. Well, it's record keeping, right? There's three or four done with all of it. They should be less than 1% in the plan.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Second, almost every single time we lower the fees very substantially. And then third, we bring a common sense investment approach, you know, low cost, index funds in the portfolio along with ways where the client can choose a model and get their money managed that way. And so we're seeing very fast growth in that space. It's just the private side is growing much faster. But I think that the key in the 401k space is to be competitive, you have to be able to drive fees way, way, way down. We found a way 25 bases.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“But what we bring to our clients is almost always they're going from the traditional model of an insurance company providing it to a fiduciary providing it. And there's a lot of liability around 41k plans now. So if you're on the board making decisions for 40s, you've got liability. If you're an HR, if you're the owner, you've got liability. So they love transferring that liability to a fiduciary, and we offer that full fiduciary service.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“I think we probably have three, four billion in 401 chaos, and it's growing very rapidly. And we're divided into two segments. One segment is takes care of bigger plans where employees want to sit down one-on-one with somebody, learn a lot, health help. Another one is very technology-oriented startup plans, small plans where the economics of building a 401k are very difficult for those folks. Maybe it's two dentists starting a practice. Right.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“When the music stops, you don't want to be that person. Right. But I think there's more of the good guys than the bad guys”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, I see two, well, a couple different things happening. One is you see someone comes in and actually makes your place better and helps institutionalize it and grow it. That's one group. And there's another group that's like, hey, we're going to come in. We're going to buy it. We're going to get rid of a bunch of people. We're going to put in some new people. We're going to go buy 23 firms. We don't care what they look like. We're going to put all this crap together and we're going to sell it to somebody else because there's a bunch of money sloshing around. And eventually someone's going to get stuck, right?”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“And probably isn't best for the employee anymore. And everyone can smell it, right? And eventually the smell will get bad enough that you'll lose employees, you'll lose clients, but by then the person who put it all together is long gone.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“That don't operate the same, don't do the same things. That's what I think of as a Frankenfirm. I think that buck is getting passed from one private equity firm to another and is going to explode in somebody's lap. And a lot of the larger firms, that's what they are. They're just an amalgamation of a bunch of stuff that's not philosophically consistent. I do think this is one of the negatives of private equity is you have private equity come into a space like this. Let's say they want to exit in three years. You take a $2 billion firm, you buy eight firms, you make it $4 billion, you exit, you make 50%, everyone's high fiving. But somebody now has something that doesn't really probably isn't best for the client anymore.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“That is you, right? No, I look at some of these, some of the private equity firms in this space. They come in, they buy a $1 billion, $2 billion firm, they call it a platform. Right. And then they take that firm and they go buy other firms and go, oh, we'll do your compliance in HR and financial stuff for you and give you a big check. Come join us. Oh, you use this software. Oh, that's fine. Keep using it. Oh, you believe in exiting the market when your signals from your bond desk say this. Oh, yeah, go ahead and keep doing that. And you wind up with a firm and it grows to 10 billion, and it's really just 25 small firms”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh, by the way, we've got a hedge fund thing over here, and the large cap mutual funds over there. It's one voice, one philosophy, consistent messaging. If a client gets a newsletter for me, they're not going, what the hell is this? You know, I'm in Los Angeles and my advisor is doing something completely different. That's not happening. And what's great about that is we don't have to write vague garbage, right? We can be very... Specific about what we believe and what we're doing at any point in the market cycle because everyone's going to read that and go, yeah, that's what I'm experiencing.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Cap mutual funds. When I say that's what I believe, that's what creative believes, right? So if you're coming and interviewing a creative planning, you're not coming to creative planning unless you believe that or close enough and you're going to act that way. There is no...”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Does options for all his clients in office too is a guy who does bonds for all his clients at Creative Planning, it's the same thing. Every client is going through a planning process. It doesn't matter if they're on the Forbes list, which is somebody we started with a couple weeks ago. It's going through the same process as somebody who's got 500,000 dollars. And we have that process in place because we know that in our We've developed a way that we think is the best way to get the information we need from the clients to figure out what their needs, their dreams, their vision are. It sounds cheesy, but sometimes your goals are not your dreams, right? So we want to know what they're really trying to accomplish and how feasible it all is. So everyone's going through that same process. And then we have a philosophy. So when we were talking earlier about we don't believe in hedge funds, but we believe in private equity and alternatives. And I believe that the markets are fairly efficient. So we use indexing instead of large...”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I think that we are definitely a one voice firm. And I think that that's a. Different firms have different decisions. When you look at larger RAAs, they tend not to be that way. They tend to look like a brokerage house. You can go to Morgan Stanley and the guy in office one might be a guy”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Beyond the onboarding, so they're coming in to do all kinds of stuff throughout the year, and then they do annual reviews with us. So they're seeing, they're talking to their advisor and multiple people within creative planning, plus hearing the voice of the investment team and the firm many, many different ways throughout the year.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“We have an annual symposium that we invite clients to. We had almost 3,000 at our last one. Really? A great experience. We email the videos of the speakers that will allow us to send videos to our clients. And then for us, we see our clients in person.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“So, I write newsletters many times throughout the year, and anytime there's a big event. Brexit that night, they'll get a newsletter. It's just instantly we'll send out a communication, others in the firm write newsletters. We do several different podcasts that we share with our clients internally, internally. Interesting.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“And you telling the story of what you're all about. And I mean, she was right. And I like back now as probably being so under the radar is for that time period was probably good, but that was probably the best piece of advice I've had in the last three or four years.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“That you really can't, there is no under the radar anymore, anyway. And so if you want people to learn, it'd be nice if they at least heard your voice.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you know, I had a client that was in PR and she sat across from me at an annual review we had, and she said, Peter, I've never seen a firm do so little with so much. And I said, what do you mean? She's like, you guys don't have, you're not even on, we weren't on social media, which is funny talking to you because there's no firm as present on social media as yours in the space. I mean, we, I mean, I think my Facebook page was controlled by Russians. Literally like you went to my Facebook page. And she's like, you know, people are looking at Creative Planning. They're Googling and they're going to the... They're not seeing anything you're saying, right? They're just seeing what other people are saying. And so you should at least tell your story. And, you know, it was kind of a light bulb for me”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I think that we've gotten a lot more attention now, obviously, as we've gotten to this size. And we reach just a point where we either had to embrace it or it was not going to go great. So we're to the embracing it. So that was my point.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I think you got it right. We tried for a long time to do nothing, to have no exposure. And there was one industry publication that had called maybe for the third time to do an interview, and I didn't respond. And I got an email from the reporter who said, hey, we're doing a story on creative planning. And right now we just have quotes from your competitors. So do you want to be interviewed or not? That's a smart approach. Yeah. And they made the headline was outing a reluctant star. And that was the beginning of the. That's a great headline of being totally under the radar. That was the end of that.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Even in the financial crisis, more money was coming into creative planning than leaving every single month from 04 to to today. And we've never had a period of time of any significance where there wasn't tremendous positive employee flow, right? We are attracting clients and employees with our behavior. And I think a big part of that is that they know that this is a place where through thick and thin, I'm going to be with them to the end. I'm going to be in the battle.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“So I think that because I'm not into the maximization of it, that fits, I think, our needs where we could take. Sell five to 18% somewhere in that range, raise enough money that when we're going to the next crisis at our annual meeting, I can say what I always did, which is we're never, ever going to let anybody go because of what's going on in the markets or with the economy. In fact, I'm going to keep doing what I've done every quarter of my entire career, which is fine, hire good people and bring on new clients. You know, creative planning in its entire history has never had a month that didn't have positive flow.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“In general, they're going to pay you 25% less. And they're going to do that because they don't have any control. No control, exactly. So they're really betting on you to continue to do a good job and not be an idiot about something strategic, right? All right.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, you have two choices. You could hope nothing happens the next couple years and build it from cash flow. Or kind of foolish. Or you can sell a minority stake where you still control everything. And when you sell a minority stake, you don't get a full valuation. You get a discount. Oh, really? Yeah. If somebody's going to buy a minority stake.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“If you don't do it Right. And I would have no regret minimization because I just that's not what's motivating me. I want to build the best offering. I want to be able to look back and go anybody that came to work for creative planning said, you know what? I was challenged. I learned something. Peter never put anything in my way. In fact, there was an obstacle in my way. He removed it. And I was able to achieve the very best I could there. That matters a lot to me. I want clients when they're at our annual event and they're talking to each other. I want them to say, you know what, creative planning promise some things to me. And they delivered all those things. And I feel great about my decision to come there. I am very motivated by those things. It's great that we're in a business that happens to be very hot right now. But if it is half as hot five years from now, I'm going to be fine. You know, you can only one steak dinner a night. And I feel like I've already achieved that. I'm in my 40s and I'm just motivated by...”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“If you are not in love with what you're doing, take the money and run because this is really, really good times right now. And we don't know what it's going to be like in four or five years. But for me, I mean, that's right.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't have to maximize, right? So when I, but I'll tell you what I'm sitting with clients and they tell me I'm worn out. I've grown my business to this level. I got this offer from private equity. What should I do? I tell them, look.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“No, I know what I would do. I'd still have a good time. I could be in this industry and have a great time. I don't have to do it on this scale and at this pace. But I do enjoy it. I enjoy the clients and I enjoy the team that I work with. And I don't. It's easy for somebody who's worth millions of dollars to say they don't care about money. So I'm not going to say I don't care about money. I obviously do. I don't care about more money.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think I'll get that. I don't think I'll get that number because I think in five years. I think rates will be different and private equity will be different. And who knows? There could be a recession. There could be contracts. Who knows? But there's too many things that are perfect right now. And that I'm not confident are going to be perfect in five years. And I don't think there's any precedent for them being. But you've never been tempted to.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, I think I've already seen that a couple of those offers where I looked at them and said, you know, I. I really truly believe that I can double this business. And five years from now not get that number. I think the market's so insane now. But, I mean.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“It was too easy. I mean, they're coming in, they had five mutual funds. They're paying the mutual funds more than they're going to pay us. I'm going to do a lot more. I'm going to lower their taxes. I mean, what's not to like? Now all of that's out the window. ETFs. Now all of a sudden, five basis points for an S&P 500 fund is crazy ridiculous. It's free now, you know. And so we've seen that tipping point with everything else. And this is the one space that's left. And we don't see it here yet because there's not a firm that has the scale to really do it. And I think firms are emerging that have the scale and aren't entirely motivated by profits that might be the one to deliver it and that just might be creative planning.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“So maybe it is over 20 years. Look what just happened with trading fees. So they went from 20 to 10 to 5. Oh, we're on this trend. It could be another 10 years. Then Schwab goes to zero. And at the end of the day, TD goes to zero. And the next week, Fidelity goes to zero. So you had 100% drop from five in a couple of days, right? So there is always a tipping point. We saw it with mutual funds where commissions are fee only. Who cares, then all of a sudden commissions were gone, right? Then high cost mutual funds, who cares? The people, the prospective clients I met in 07, 0809.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“I think if you're a pure money manager, you're going to start looking at 50 basis points. If you're a money manager with planning light, you're going to look at 60, 65 basis points. If you're a comprehensive wealth manager doing everything customized and needs-based with a lot of other services, you can go a little bit higher than that. But that's substantive. And I think it's going to be quick. I think a lot of people think, oh, this happens over 20 years and blah, blah, blah.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“All of us are certified financial planner certificates. We all of us sit in front of clients, all the directors in the firm do. We understand how that deliverable works. And that becomes a big differentiator. And that has created a lot of fee compression in the industry because for someone to compete with us on a large scale, they've had to start to add these things without changing their fee. Now, once that's done, what happens? Once that's done, the next wave happens and you've got a lower fees. And I think we're going to be on the front end of that. The second it can happen, we're going to do what we can to push those down and push our competitors out.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“There's charitable components, there's legal components, there's tax components, there's investment components. That to me is what the client values the most, is getting that advice delivered in a way that is actionable and makes sense to them. That's the part that I'm most passionate about. But if you look at the larger RAAs, we were the first to do that. And almost all of the other large RIAs have changed what they're doing to try to put together some semblance of what we're doing, but they've done it too late, they've done it with private equity money, they've done it with people that are CEOs that have never been advisors or are not advisors today. And it's just clunkier. And so I think that's the competitive advantage we have today is from top to bottom, the president, the vice president, the COO, all of us are planners.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“That's hidden fee compression. We're set up that way because that's what we philosophically believed in from the beginning. I'm super passionate about this business. I'm going to be in this business until I'm going to die working in this business. I love this business. I love sitting down with a client and saying, here's where you are right now. By the way, we can do these seven things and all those things you talked about that you're dreaming about. I can increase really a lot the chances all those things are going to happen for you. I love that. That's my favorite part of this whole thing. But that has different components to it.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“For that. So there's all of this advice and specialists that they can access when our clients are trying to figure out they've retired and they're not at Medicare yet. We have a team that does nothing but advise them on what health plan should they get and helping them implement it and all those things. So you have all of these different things that cost something, but we're not adding anything to the fee, to the client.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“That's exactly right. And sometimes we're able to negotiate breaks for them. But yeah, we're definitely not marking it up. So you're adding some complexity. We have to have a whole other team, but we don't have a separate fee. We give legal advice and do trust funding without a separate fee. We give tax advice without a separate fee. We won't prepare a document most of the time without a separate fee.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source
“So they'll come in and they'll get planning, investment management. When we use alternatives, we don't have a separate fee. We don't have a pooled asset fee. That's all part of it.”
2019-12-13 · Masters in Business · Peter Mallouk on Building a Powerhouse RIA · IDENTIFIED FROM THE TRANSCRIPT · source