An Educated Investor Is an Adviser’s Best Customer
Low interest rates and abundant capital have sent private-equity firms hunting for steady cash flows.
(Bloomberg Opinion) -- How do you take a little-known money management firm in the suburbs of Kansas City, Missouri, with $150 million in assets and build it into a $45 billion powerhouse? To find out, Masters in Business sat down with Peter Mallouk, chief executive officer of Creative Planning Inc. and the author of “The 5 Mistakes Every Investor Makes and How to Avoid Them.”
Mallouk explains how he used education to ensure clients understood the challenges of investing in markets that rise and fall. The firm grew during the 2007-09 financial crisis, even as other firms were losing clients and advisers. Mallouk credits this proactive approach for much of the success.
We also discuss why mergers and acquisitions among registered investment advisers are hot. Low interest rates and abundant capital have sent private-equity firms hunting for steady cash flows -- and they found them in advisory firms because of the consistent fees earned by asset managers. Prices paid for RIAs have driven valuations higher. Mallouk believes we are near peak M&A for the sector.
His favorite books can be seen here.
Next week, we speak with investor Sarah Cone, founder of Social Impact Capital, a New York-based venture-capital firm focusing on “teams doing good with technology.”
To contact the editor responsible for this story: James Greiff at jgreiff@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”
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