Secrets of a $300 Billion Investment Advisor - Peter Mallouk, Josh Brown, Michael Batnick
Peter Mallouk, of Creative Planning, shared great advice during his recent interview with Josh Brown and Michael Batnick at Future Proof 2024.
Creative Planning has grown tremendously, and Peter's insights offer a roadmap for advisors at all stages of their journey.
I highly recommend watching the full interview, but here are some of the key takeaways.
Key Takeaway 1: Advice for Young Advisors
Proximity to Success [35:48 - 36:57]
At the START, Choose Your Environment Wisely: Peter emphasizes the importance of your environment. Being around successful, high-integrity professionals will shape your career more than anything else.Advice:
- Surround yourself with people who are successful in the way you want to be successful.
- Choose your first job or mentorship carefully. Work with people you want to be like.
Side Note: We’re looking for financial advisors to join Streamline Financial. Reply to one of my emails if you want to learn more about the position.
Key Takeaway 2: Leverage Social Proof
Building Credibility [10:13 - 12:04]
Use Social Proof to Attract Clients: Peter compares choosing a financial advisor to picking a restaurant based on reviews. Clients want to know they’re with the best.Advice:
- Use client testimonials and case studies to build credibility (after talking to compliance)
- Ensure your online presence reflects the quality of your service.
My Thoughts:
What changed our entire business was when we started sharing free content, education, and stories online. Content marketing can be a powerful form of social proof.
Key Takeaway 3: Focus on Net Flows Over AUM
Tracking the Right Metrics [06:20 - 07:50]
Net Flows Are the True Indicator of Success: Peter prioritizes net flows over AUM as an indicator of client satisfaction and firm health.Advice:
- Track net flows daily to gauge whether you’re truly growing.
- If net flows are negative, reassess your client value proposition.
My Thoughts:
Our #1 Dashboard we have at Streamline is called "NAT". It measures the Net Assets and Net New Revenue each month. It's a great quick health check on the company.
Key Takeaway 4: Become a One-Stop Shop
Offering Comprehensive Solutions [16:20 - 17:02]
Clients Want Convenience: High-net-worth individuals prefer to have all their financial needs handled in one place. If your client is telling you of a major financial decision AFTER the fact, then you're not their main advisor.Advice:
- Aim to be the primary financial contact for your clients.
- Evaluate additional services to offer comprehensive solutions.
My Thoughts:
You don’t need a CPA and attorney in-house to offer greater service to clients. Look into the many software like Holistiplan for tax planning or Wealth .com for estate planning.
Key Takeaway 5: Embrace Industry Fragmentation
Opportunities in a Fragmented Market [04:25 - 05:01]
Fragmentation Means Opportunity: Despite the presence of large players, the financial advisory industry is still highly fragmented.Advice:
- Focus on a niche to differentiate your services.
- Deliver exceptional value to stand out from larger firms.
My Thoughts:
Many advisors think the market is saturated, but Peter’s point about fragmentation reminds us that there are always niches and opportunities if we look for them.
Actionable Steps for Advisors:
- Identify Your Niche Focus on a specific market like business owners, retirees, or young professionals.
- Enhance Your Online Presence: Use testimonials and content marketing to build credibility.
- Track Net Flows Use net flows as your primary growth metric.
- Expand Services Add complementary services like tax or estate planning to increase client value.
- Leverage Technology Implement tools that streamline client interactions and enhance the client experience.
