Read part one here: Do you know if your broker is a bully?
Meeting Peter Mallouk
Nearly a year after the first edition Money: Master the Game was released, I was introduced to Peter Mallouk — an impressive guy, even by my standards. He is, by all accounts, the epitome of excellence in the wealth management world. Peter and his firm, Creative Planning, manage nearly $20 billion in assets and carry a number of prestigious accolades — including being the only wealth manager in history to have been ranked #1 Independent Financial Advisor in America by Barron’s three years in a row. And they are also now ranked the #1 Wealth Management Firm in America by CNBC for the second consecutive year. It’s great to see a true fiduciary topping the charts. Creative Planning’s typical client is the millionaire next door, but they also have an elite group that works the ultra-wealthy ($10 million or more).
Peter and his team, with a little arm-twisting from me, recently went from serving only higher net worth folks to opening up a new division to accept smaller accounts. His team will provide a complimentary second opinion to anyone and help them uncover the layers of conflicts, hidden fees and proprietary funds in their current scenario. A free second opinion from the #1-ranked firm is a no brainer, right? www.TheNumberOneFirm.com
Peter had asked for a meeting with me, knowing my passion for protecting clients and my commitment to real and absolute transparency in the personal financial sector. What he shared with me left me completely disheartened. After years of trying to educate millions of people on the difference between a broker and a fiduciary and stressing the need for a fiduciary standard, Peter showed me a mountain of evidence that many “fiduciaries” were exploiting a legal loophole to make additional revenue off unsuspecting clients.
How so? It turns out that fiduciaries can moonlight as a broker when it suits their pocket book. You heard me right. Somehow, regulators will allow advisors to be both a fiduciary and a broker through a process called “dual registration.” One foot in both camps. Talk about a wolf in sheep’s clothing. That’s like sitting in your doctor’s office and after diagnosing you, he prescribes you a medication that he mixes up in the backroom and sells at a profit! We would never accept such a conflict!
