(Bloomberg) — From an office park in a Kansas City suburb, Peter Mallouk has grown Creative Planning into one of the country’s biggest financial advisors, managing or advising about $350 billion of clients’ money. Its slogan: “Experience a richer way to wealth.”
No one personifies that mantra better than Mallouk. When he took over the firm more than two decades ago, its clients numbered in the dozens. In September TPG Inc. acquired a minority stake in a deal that valued Creative Planning at $16 billion including debt.
Mallouk, 55, who maintained a majority stake, has seen his net worth jump to $10.6 billion, according to the Bloomberg Billionaires Index, which is valuing his wealth for the first time. That puts him among the world’s 500 richest people and makes him the wealthiest financial advisor after Fisher Investments’ Ken Fisher.
“There was no way to foresee all this happening,” Mallouk said about Creative’s swift growth, amounting to a doubling of assets on average every few years. “I’d have never predicted or guessed.”
His peers and industry observers are less surprised. They describe the Kansas City native as a shrewd and charismatic operator who has balanced a folksy, Midwestern appeal with a tenacious focus on brand-building. He’s authored four financial self-help books, two of them with Tony Robbins, and still advises a roster of his own clients.
“I can say without hesitation that his success is no accident,” Robbins said in an email.
Even after two rounds of investment from private equity, Mallouk has managed to hold on to the bulk of his firm. “The fact that he’s been able to maintain control is precisely why he’s been able to grow his personal net worth the way he has,” said Jessica Polito, principal at deal advisor Turkey Hill Management.
Surging Wealth
The surge in wealth unleashed during Covid and sustained by buoyant equity markets and government spending has been an undeniable tailwind for Creative Planning and its competitors. US household wealth has increased 45% since the onset of the pandemic to a record $160 trillion in the third quarter of 2024, Federal Reserve data show. America is home to almost 22 million millionaires, more than any other country, according to UBS Group AG.
The jump in wealth and the added complexity that comes with it boosted demand for personalized financial advice and a growing number of registered investment advisors, or RIAs, have formed to dispense it. Rising to the top of an industry marked by intense competition, rapid growth and frequent churn is a feat, particularly in a business that relies heavily on personal relationships and employees’ talent for winning and maintaining wealthy people’s trust.
From a young age, Mallouk exhibited hustle. Born to Egyptian immigrants — his father was a physician and his mother, a teacher — Mallouk delivered papers, DJ’d and mowed lawns as a kid, then opened and ran a chain of record stores while earning business and law degrees from the University of Kansas, which he also attended as an undergrad. As the growth of piracy in the early 2000s crippled the music stores, he fell back on his law degree and began advising physicians and the clients of some financial advisors he knew on wills and trust matters.
The process of getting financial advice struck him as needlessly complex and unwieldy for clients, requiring separate visits to different professionals for things like legal counsel and insurance.
“I was hearing this at home, and watching my dad literally go to the library to read books to make sure he got treated fairly,” Mallouk said. “I realized, what if I could solve all these problems at once?”
One-Stop Shopping
When he took over Creative Planning in 2004 from one of the financial advisors he consulted for, his goal was to create a kind of one-stop shop where clients could get tailored financial plans as well as advice on taxes, estate planning and a range of legal issues. Mallouk likened it to a family office for the merely rich. The average Creative client is a multimillionaire, he said, while those with an average account of $10 million-plus make up the fastest-growing part of its business.
Most independent financial advisors grow through acquisitions, which has led to a boom in deals recently. For years, Mallouk sat it out and chose to grow organically. He made his first significant purchase just six years ago, buying a father-and-son adviser team in Minneapolis, and has since been on something of a spree.
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Creative Planning bought Goldman Sachs Group Inc.’s investment-advisor business in 2023 for an undisclosed sum as the Wall Street bank sought to unwind its foray into the mass-affluent market. The deal highlighted another trend: Clients gravitating toward independent RIAs and away from those owned by big banks that are sometimes viewed as conflicted for hawking their own products.
Mallouk prefers to source his own deals and counterparties call him a tough but transparent negotiator. The firms he buys are rebranded as Creative Planning to iron out inefficiencies and enhance what he calls the “very strong tree trunk.”
Midwest Sensibilities
Creative now has offices scattered across the U.S., but its Kansas roots are a strong selling point, said Mallouk, who’s also a minority investor in the Kansas City Royals baseball team.
“Clients love that they’re dealing with a firm from the Midwest,” said the married father of three, whose children are all current or former University of Kansas students. “I think they just feel a sense that there’s a work ethic of stability and integrity and all those things.”
As for his own personal finances, he has no plans to change how he manages them in light of his multibillion-dollar net worth. Like most Creative clients, a chunk of his portfolio is in passively managed public equities that regularly rebalance and harvest tax losses. He also has other assets — including private debt and equity, as well as the Kansas City Royals stake — but no “stupid” hedge funds, which he considers costly, poor-performing investments.
“To me, the philosophy does not change,” he said. “The public markets don’t get any easier to beat if you have a lot of money.”