In-House Trading
To save on costs, everything that isn’t referred to a custodian is done in-house, even trading. “I’m not interested in farming stuff out, because I want our firm to control the quality and delivery from beginning to end,” says Mallouk. “The old model of having your advisor call in someone else to manage client money is dead, and firms like Creative Planning are going to keep taking share from those that don’t maintain the expertise in-house.”
The Multimillionaire Next Door
One of Mallouk’s mottos is that he’s bringing this model to not just an elite group but the “millionaire or multimillionaire next door.” The majority of clients are “in the top few percent of the population in terms of assets,” he says. But not all. The minimum account is $500,000, though that may be waived for “someone who is related to a client or for some other reason,” he says. “We don’t target a particular population.”
Despite its size and growth, client relationships remain critical. “I have had a lot of advisors, and these people are down to earth and they listen,” says Mike Ismert, a retiree in Kansas City, Mo., and a client since the beginning. “[An] incredible team, and they always get back to me within minutes with a straight answer to my questions. It’s Service with a capital ‘S.’”
Outside the business, Mallouk and crew are devoted to community service. Mallouk, who is married and has three children, is actively involved in a local children’s charity he helped found called KC CAN—as are many of his employees. In addition, staffers deliver hundreds of Thanksgiving meals to the needy every year and assist various medical charities. “Ours is a culture where people are willing to participate,” he reflects with pride. “We realize the community has been good to us, and we do what we can to give back.”
There’s a surprising lesson to be learned from assisting the needy, says Mallouk. “In many ways, they are the same as our high-net-worth clients. Some are just more fortunate than others, for whatever reason,” he muses. “Working with one end of the spectrum has opened my eyes to the other end of the spectrum.”
The Future
Creative Planning’s incredible decade may be a hard act to follow. But so far, Mallouk has no intention of changing anything. “We don’t have a business plan that lays out a precise road map for where we’re going,” he says. “We simply want to continue to be the best we can for our clients and to be in a position where we’re able to accommodate the opportunities that should follow from that.”
Mallouk is not averse to suggestions, though. “We’re always looking for ways to improve,” says Randall P. Hallier, a wealth manager in the firm’s Naples, Fla., offices. “Peter has an open-door policy on receiving suggestions from all team members. It’s typical to see new policies and procedures introduced.”
As for market predictions, Mallouk concedes he has no idea. “Anybody who thinks they know where the market is going is someone I wouldn’t take advice from,” he says.