Bloomberg Audio Studios, podcasts, radio news. This is Master's in Business with Barry Ridholds on Bloomberg Radio. This week on the podcast, I have an extra special guest. What can I say about Peter Maluke. He began as an attorney, working on things like taxes and trust and estates and consulting for various RIA firms when he became an RIA and eventually bought Creative Planning when it had you know, a handful of clients and you know, thirty thirty five
million dollars. He has since built Creative Planning into one of the nation's largest rias and an absolute powerhouse, running over three hundred billion dollars. Peter is the guy I look to when I want to learn things about how to build a firm, how to grow organically, how to think about out acquisitions, how to structure your company, really to become an enterprise as opposed to merely being a business.
Peter is also the author of two really interesting books, The Five Mistakes Every Investor Makes and How to Avoid Them, and his latest book is Money Simplified. Whether you're an RIA or an entrepreneur, whether you're interested in finding out about who should manage your money and what you should look at when you talk to creative planning. I thought this conversation was absolutely fascinating, and I think you will also with no further ado, my discussion with Creative Plannings Peter Maluk.
It's great to be back there.
So I didn't mean to imply that the other books weren't interesting. I just those are the two most recent books I wanted to emphasize. But let's talk a little bit about your background in your career, which is so interesting. You get a jd MBA from the University of Kansas in nineteen ninety six. That's an interesting combination. What was the plan for your career with that combo?
Oh? So here was the brilliant plan. I had had been an undergrad at KU for quite a while and I was having an incredible time. My brothers were, you know, three four years younger than me, so they were coming in when I was a senior. I didn't want to leave, and so I thought I'll just stay and get a get a master's degree. And then I learned that KU
was launching this combination thing. Instead of doing a law degree for three years and MBA for two, you could combine them and do it in four and if you went in the summers, you could do it in three. And so I signed up for it with no plan other than to stay at KU a little bit, a little that was the plan. I'm having fun.
Your siblings went to the same school at the same time. Well, KU is a big joint. What was that like?
It was a blast? I mean, it's it's a it's a really really fun town. My oldest son just graduated from there. My my youngest two are going there next year. So I get to relive it, you know, through them a little bit. And many things have changed, but a lot of things are exactly the same. That's one of the reasons. I think a lot of people like going back to the schools that they graduated from.
So long before you went to KU, Creative Planning was formed in Kansas. That was back in nineteen eighty three. What led you to acquire the company in two thousand and four? You were an employee at the time, weren't you.
I was, so I had started out, you know, accidental journey to becoming an advisor, and I really found myself as an advisor to advisors. So I would go from one brokerage house to another, and one independent advisor to another from morning till you know, the day was over, and I would do legal work for their clients, or
give tax advice, or do planning or investments. And at some point, the people that were running the financial planning department for Creative Planning, which was a sister company to an insurance company, there were three guys that were selling
disability insurance to physicians in Kansas City. One of them passed away at a young age, one became disabled to a young age, and the people that were running the financial planning arm had left, and the owner of that firm is incredible guy, had brought me in to handle the planning and investments for Creative Planning. So while I was doing all this work for other advisors, I was also managing you know, their thirty or forty clients that
they had at the time too. And that's where, you know, from ninety eight to four, I got this sense of Hey, all day, every day, I'm doing little pieces for different people. What if there was a firm that did all of this in one place.
One quarterback to oversee everything that's right? Oh four, you do the acquisition. I mean you're working as an attorney for a advisory firm. It's kind of hard to write a big check at that point. How did this process go about you for you acquiring, Well, I.
Mean it was it was managing a very very small amount of money, so there was no big check. There was no big check to be written, or I wouldn't have been able to buy it. And he was, you know, very great. I mean we're talking like, you know, six figure check right spread out over you know, sixty months. So it was not a this was not a big operation at the time.
And thirty four million dollars not a lot of money, that's right. And now it's up. What is that a thousand x? You're over three hundred billion. Let's talk about how you got there. You for the first what is that fifteen years, did no acquisitions, so strictly organically grew from thirty four million to forty two billion. That is a giant one hundred x set of gains. How do you grow a company organically that quickly?
Well, I think we were ahead of the game and a lot of things that now a lot of firms have started to do. And I think like we were doing financial planning without a separate fee. We were passive on the equity side. We never used hedge funds, but we used private equity, private lending. You know, very early on for an RIA, we were doing legal, tax, investments, trust services, planning all under one roof. That was definitely revolutionary at the time. You know, there are the other
are firms. You know that your ten years fifteen years later started to add those things. We had a very big hit start and the market really responded to those things. Like if you look here twenty years later, where did the market go On the equity side, It went from active to passa while we were there in the beginning. On the private side, where has it gone from hedge funds to private investments? We were there very early. It used to charge separately for a planning fee. Now it's
more the way creative planning did it. And this idea of adding other services in one place. The market's moving there too. So I think we were just ahead on all of those things. We had a big advantage in that regard. I think when people are looking for an advisor, they like to see usually two things. I think one they want to see that you know what you're doing and it's very hard to figure out that somebody knows
what they're doing. But they could look at Creative and go, well, Creator's been doing this a very very long time, right, And if they can go talk to one hundred advisors, none of them would have been doing what we're doing back then, right, So I think they just know, hey, we've been doing it longer, and we've got probably more people, you know, doing these services, more specialties, more people with
those designations. We're now divided out and working with ultra affluent people and the mass affluent and having different teams that serve all of these And I think an investor, a prospective client can figure that out in pretty short order. You know, when my son and I were walking here to the studio, we were trying to figure out, you know, where to eat. We didn't have any time. We're gonna have to eat and walk right so here in New
York City, and we got in late. We wanted to make it on time here as close as we could. So what do we do? We stopped at a food truck, a bunch of food trucks, but there was one food truck that say lone voted but best whatever, Trip Advisor all that that's the one we stopped at, right, because it feels like there's some social proof there that is food Truck's food's probably better than the other ones. It's sure enough. My son was like, if I was in Can't City, I wo'd eat this every day, you know,
for lunch. I think when you look at an advisor, you know we're both in the professions. So it seems, well, I mean, does it that big a deal to we
be doing get a long time? Well? I mean, if you get yourself out of the professional profession in a medical condition, right, and you're looking for a doctor, you like the doctor that's been doing it for a few decades, with an enormous team that's invested in all this technology, it's probably already made the mistakes they're going to make that if something weird shows up, they've probably seen it before.
That is creative planning. And so the growth, it compounds because the longer you've been doing it, the more that credibility you have.
So you mentioned you have all these different teams and all these different people. How do you maintain the corporate culture when you scale up one hundred x? Like that's a real challenge. How do you keep old horses pulling the sleigh in the same direction.
Why take this incredibly seriously because you know, in this business, all you really have is what's in people's brains and in their hearts. Right, You've got to have people that know what they're doing and they care about people, right, Because this isn't like we're not a hedge fund, we're not a mutual fund. Nothing's wrong with those things, but
we're dealing with actual human beings. You know, whether a creative, whether you're a CPA or an attorney or a planner, a wealth manager or whatever, you're sitting across the table from somebody, you have to have that kind of consultative nature about you or you're not going to be successful, certainly not be able to do right by the client. And so I look at culture a couple of things. One, it's who you let in in the first place. Right, So when I'm interviewing, it's not just who I want in,
it's who do I want to keep out? So I'm always the last stop in an interview. Mine's always just a few minutes.
Even today with how many of you guys have over a thousand employees, twenty four hundred. Yeah, So every one of them. You gave the stamp of approval before they came in.
Yeah, and I'll block quite a few now their background check before they get to be somebody is already. Somebody's already said, hey, I like them for my department. They know what they're doing and all that we're not, you know, we're not perfect. But there's a lot of screens in here.
But what I'm just looking for is, you know, every now and then you have a leader and they're just desperate to fill a role, right, and you really have to you want to avoid that desperate hire where they bring that jerk in right right, Because you know, I was talking to somebody the other day about are most people good? Are most people bad? And we were talking about, well, yeah, think about all the violent crime and assaults and all this stuff, and the reality is most people are good,
but one bad person causes so much damage. We had someone that became a client because someone was stealing from them and employe was stealing from them. Will turns out they were stealing from four other businesses too, do you know what I mean? Like so, but that's normal, right, someone who commits sexual assault, it's a very tiny group of people that commit sexual assaults. The problem is the average person does it over and over and over, so
you create disproportion victims. Well, I look at it like weeds in a garden. You get that one person in your firm and they're a little bit of a jerk, or they're overly self serving, or they can turn the culture very very fast and cause a lot of distraction. I think the biggest successes I've had in my career are who I've hired. The biggest failures I've had in
my career are are who I've hired. And so I think, like you look at the social curve, part of it's attracting the right talent, but getting that you know, sociopath or that kind of like really narcissistic type personality, keeping that person out of your firm. I think that's step one in the culture. Step two is if you make a mistake, and we make mistakes, correct it fast. I'm really bad at this, by the way, Verry.
Really it's hard to do. We all know the expression high or slowly fire fast, but it's very It's much harder to do than the sound.
Yeah, And what's changed my thinking on this is I used to just drag it out and drag it out and drag it out. And this you know woman in our firm who started with me early on, she you know, came to me once she said like, hey, you think you're doing this person a favor, but you're really doing
is you're punishing the rest of us. And that just changed my thinking about it overnight, Like now I feel like you're sending a message to the rest of the firm and what you'll tolerate, whether it's in competence or ill will or whatever. So getting people out, you know, quickly, is another very big piece of it. And then the
other part is who do you make a leader. You can't just make the leader the person who was really good at something, right, Like you can't say, okay, you're really good at taxes, I'm going to make you the head of the tax group.
Or you're really you got a different set of skills.
Yes, you really need somebody who embodies the culture where you know, someone was just asking us we do this thing called ask Me Anything at Creative Planning where every six months, separate from the other things we do, there's just an hour people can ask me whatever they want. And somebody said, well, what do you know? What's the message you want your leaders to give? And I said,
I want my leader to be the message. Right. If you have to ask what the the leader should just persona what they want, what the example is of what it's supposed to be. That's the type of person you got to do all those things intentionally. Culture is very fragile. I think we've been graded, and I think a big part of it is that we've got the right leaders in place.
Let's also talk about your headquarters. You're an overland park, Kansas. The typical investment farm seems to be east coast or west coast. What are the advantages of being located in Kansas?
See this is a happy accident too, kind of like how I wound up with my majors or wound up in the profession. It's just I was born and raised in Kansas City and just was never ambitious enough to go do anything else. You know, when my brothers moved to Dallas and one moved to la and they both enormously you know successful. All my aunts and uncles moved
to different cities. But I graduated, went back to Kansas City, got a job, and next thing I knew I was running Creative Planning, and by the time I even thought about where I was located, Creative Planning had been you know, too successful to consider anything else. Once I tried to get my family to move twenty blocks and my kids started, you know, screaming and ran upstairs clear and nothing, you know,
nothing was going to happen. So but it's been absolutely amazing because to this day in my life, I have not done a coast to coast flight. I mean I travel every week, and it's very easy to get around the country. If you are are you're.
Never more than two and a half hours away from anyway.
Everything's pretty everything's pretty probably yeah, yeah, I mean continental US, right, so everything's really easy to get to something, to visit an office, see a team or or give it a presentation, or see a client. You know, I can do it. And I also think that there is something to be said for and I think it sounds cliche, but it's not just this midwack Midwest ethics, Midwest work ethic and
and kind of the attitude, this bias towards integrity. I found it very very easy to hire very high quality people, and so many of our firm's partners are based in Kansas City too.
We call it Midwest nice, yes, which it really is. We have family in Chicago. Every time we're there every year for Thanksgiving, every time we're local, it's like everybody here is just so delightful. That's right, they're just so pleasant. I guess it's because they're not in a rush and the real estate isn't as expensive, so people are less stressed. That's what I usually talk it up to. But Midwest nice is really a thing.
It's really a thing. Yeah, there's a lot of reasons, but it's a real thing that I appreciate more and more every year that goes by.
Let's talk a little bit about the growth at Creative Planning. It was organic for the first fifteen years, and then in twenty nineteen you did a few acquisitions. First off, what led you to the decision to say, hey, we've gone as far as we think we can organically, let's take advantage of all this cheap capital around and start doing acquisitions.
So really, for us, I had never occurred to me to even do an acquisition. We were from the very first month growing faster as fast as we could possibly handle. It was just moving so quickly. We've always been higher. Every quarter in the history of creative play has been positive net inflows every quarter in the history of creative We've been hiring, right, and we're just growing, growing, growing, growing.
But you look at even over that period, Forbes had done a ranking of the fastest growing firms in the United States and we were number one on that list, and that was ten years in. It was over the ten year period. Even then, if you went to an average American city and visited one of our offices, we
probably didn't have a physical office. We probably had one or two advisors, and in that particular city, we might have managed, you know, eight hundred million dollars, right, So it was clear to me that I could do this till I was one hundred and ten, and I was not going to be able to build a national independent firm. I might have had the biggest independent ria, you know, at at doing that pace, I might have we would
have continued to be successful. But we had sat around a few of us and said what do we want to do, and we said, we have this opportunity to set the standard of what a client should receive from an independent wealth manager. And we looked at our competitors of who else we thought might be that standard, and we thought, you know, we you know, we're proud of what doing. We thought, Hey, this is the right way to do it. This is the right investment approach, this
is the right wealth management approach. We have this opportunity to do this, let's do it right. And so along the way we made one acquisition, very much by accident, Metafather and Son that turned out to be wonderful. But what we've observed from them was they grew faster when they were with us. Their advisors all stayed and were very happy. Their clients got more services, they referred more, so their growth rate went up. And we were like, wait a second. We did all of this and we
doubled our presence in that city was Minneapolis. This is the recipe, And we went back and started to call all the advisors over the years that had called us, and the acquisitions began. But organically, we've actually, excluding acquisitions, grown more in the last five years than the previous ten.
Wow.
So the organic growth is accelerated, but the acquisitions have been a nice way to complement it. With our goal being to become more localized to clients. Basically in every major market.
So tell us about the four toh one K acquisition did that was a substantial purchase one hundred plus billion dollars in four one K assets.
That's right. So you know, we on the on the private well side, we work with the massive fluid, We work with people that have ten million up and we work with centi millionaires and billionaires. On the for one K side, we were basically dealing with foreign K plans
that were from startup to one hundred or so million. Well, we have sixty seventy thousand private clients, many of them are CFOs CEOs of publicly traded companies, and they would say, well, hey, before you talk to my team about the four and K, how many one billion dollar four on K plans you have? I would say, well, well none, and they're like, well there's no way, you know what I mean, there's no
social proof there, right. And so what this acquisition did was they were one of the three largest independent foreworn K providers in the United States. A lot of publicly traded companies multi billion dollar foreign K plans with tens of thousands of participants. We bought, purchased that group, put it in a creative They've grown quicker because they have more of a wealth management backbone. They've got now financial wellness,
financial education. We're able to manage money, add new investments at lower fees. We just have a lot of negotiating power, so we've been able to do an enormous amount to make the offering better. And they've grown quicker also from referrals from our advisors and now those four K participants are also learning about creative planning and coming over to the private sizes. It's been a home run all the way around for us.
Sounds like it. You were also very early in the referral program with Schwab and you recently announced you were joining the referral program with Fidelity. Both those companies have notoriously loyal client basis. How do you get somebody who's custodied with Schwab or custodied with Fidelity to put creative planning first and not think of themselves as a custody client. I know that sounds odd, but you know exactly what.
I'm saying, right Well, I think the thing about those clients is, I mean, Schwab and Fidelity are the clear leader. I don't you know, who's third. I don't know who third is, right, which is now part of Schwab.
Right.
So these are enormous, incredible, and I think they're more than custodians. And I think a lot of people just want custody. They want to trade on their own. They're never coming, you know, they're not going to come to Creative planning. There's people that there are many solutions that Shoab and Fideli offer their clients, and those people perfectly satisfied with that. But Schwab and Fidelity give their their teams this flexibility to say, look, if the client's best
served with another advisor, go ahead and refer them. And I think that, you know, Schwab and Fidelity when they find that to be the case, I think they find Creative to be pretty unique in our offering and our expertise. And the client also doesn't lose anything, Right, They're still at Schwab, they are Fidelity. They've still got the same account number, they still have their website, they still got their financial consultant in the branch. They just have an advisor advising them on the account.
Now, true story. When we launched, we were using TD as our custodian and we would go on like you do. We'd go on road trips, we'd meet people, we'd meet existing clients, we'd meet prospective clients. And after like the twelfth time, someone said, hey, I'm with Schwab. There there's where my money is held. Love to hire you as an advisor, but it can only be on on Schwab, Like you hear that a dozen times, and oh maybe there's maybe we should add Schwab as a custodian. Now
we got a couple of billion dollars with them. But to get to that point, like it was like, wait, it's a custodian. Where is this intense loyalty coming from Fidelity and especially Schwab, It's it's like nothing else I've ever seen.
Well, there's a I think, a very intense feeling of safety and security and the brand carry both those brands carry such you know, equity and you know what they should. I mean, they've really delivered.
They've been around for half a century and done a really good job. That's right, all right, So you mentioned all the various services you offer, but when you began, that wasn't the place you started from, right, You were
doing some estate planning and other legal services. Tell us about the timeline that you went through adding these different services, Like, when was that aha moment, Hey, let's just wrap everything up in one nice package, put a bow on it, and not have the client have to worry about any financial issues.
Well, I mean the six years prior to Creative Planning that I was doing you know, legal advice at one place, tax another, planning and investments in another. So day one of owning Creative that was the first day. Like that, that first day we were like, okay, we're doing wills and trust we're doing financial plans, we're going to manage your money. Will be the trustee if you need us to be. Now we was me and one other person. But that's that's what we were on day one doing
those things. And what's really changed from then is this the scale. You know, the number of people. I think our tax group might be seven hundred people and the law groups well over one hundred people. And so the breadth and depth of expertise and the credentials and experience and all of all of that. The special level of specialization is you know, far beyond my wildest imagination back then. But the offering itself, the core offering. That was day one.
So when did you first add ahead of tax? When did you first add ahead of trust in the states or insurance? Because when two people are doing everything right, you know, it's such a challenge. But once you institutionalize it with those hires, I would imagine everything began to explode.
Yeah. The first the first hire was someone to take over you know, the day to day investing. The second one was someone to take over the legal the next was someone to take over insurance, then trust, and then lastly you know, tax, and so that over time, each of those and of course when you get the right person, the growth explodes.
You know, how how long did that process take before you had those six key people in place?
In the first few years, we had certain people in place, but they just weren't the right people right, So we had to get we had to get through to get to the right leader of each over time, and that, you know, really finishing it all out was only very recently. We've added services along the way, but really getting it stabilized and going about two thousand and nine.
And you even offer m and a consulting, I mean, tell us about that you have that many clients that are thinking about selling a business and need some help.
Well, this is the advantage of scale. So I think about like with a number of clients, we have thousands and thousands of them are business owners. So now you're talking about consulting, but we also do outsourced CFO, outsourced HR, we do bill pay, payroll, M and A managed it four oh and K cybersecurity testing. So that business owner client all those things that they care about protecting and that are dollars sign related, they can look to the
Creative Planning Business Services Unit to help them with that. Yeah, we definitely have enough clients to keep all those groups very, very busy.
What about one of the hot new things is the concier services for the ultra high net worth where you're essentially taking over all of their bill pay and everything from you know, buying a car to looking at real estate. How far do you go down that path?
I would say that there's you know, it kind of reminds me of the saying about family offices. If you've seen one family office, you've seen one family office. Like some family offices they're doing tax for their family, some are doing just the investments, some are only doing the private investments. Some are actually doing the private investments in house, kind of creating their own venture capital fund versus buying others. But most of them don't practice law, most of them
don't practice tax. They keep track of the real estate, they handle some private investments. The capitol calls. Everybody's different. You know, the line for us is concierge services. I mean, that's a total nightmare. We remember talking to Oh my God, like this walk my dog and I need to take us to this show and whatever, to this restaurant. I mean, that's like a full blown nightmare, right, And I have
yet to see anyone do it successfully. I've talked to some outfits that do it for athletes, and everyone's disappointed all the time. Right, I mean, it's it's a very very difficult thing. That's not something I'm really interested in doing for us. From the family office standpoint. We can handle someone's real estate, we can handle their oil and gas, we can handle their bill, pay for them all. We can help them as consulting on their business, but we're not going to like be walking the dog.
Right. The closest I ever get to that is people know I'm a car guy. Every now and then someone has a really interesting car. Hey, the dealer offered me x on this. No, no, no, that's way too low. So let's bring it to bring a trailer. We'll get you fifty grand more than that. And I've helped people actually sell cars that way and they've been thrilled that they're not getting a low bull offer from somebody, especially
if it's something kind of interesting. But I don't want to negotiate anybody's car leies for them, right, right, So let's talk a little bit about some of the m and a you've done, you've acquired. Is it more than forty farms? Now?
Is that's right?
Right? Yes, we've talked a little bit about culture. Let me ask the inverse question, what's the non negotiables when it comes to acquisition? What is like, sorry, we're gonna we're not gonna go beyond this line.
So you know, there's basically four investment bankers in our space that control maybe eighty ninety percent of the deals that are done, and I think they all know that. You know, we'll start out with a zoom with another firm. It will usually be short, and it will often end short because there's not a connection. It's not gonna work. What I have found is that the leader of the firm usually is indicative of the whole firm, Like very rarely do you meet a jerk, and then the firm
is a bunch of like wonderful people. Right, it's usually like, really does emanate you know, from the leadership, And so I am very focused on who these people are, what is their attitude, how do they communicate, and all of those things, and so I'm looking for some sort of indication of servant leadership or collaboration, a consultative nature, kindness you know about them. I think that's the type of business where we're in, like that consultative business. It's very different.
Finances is very very broad, but there's hedge funds, mutual funds estimated. Then they're dealing with people, right, So that's one, very very big part of it. The other part is they have to want to do what we do. Right, We're not doing deals just to do deals. They have to be planning, lad, they have to want to provide all of these services to clients. They have to be able to go that extra mile of Okay, now I'm going to help you with your legal and now I'm
going to do this tax question. It's not just going to be talking about investments. They have to adopt our investment philosophy, right, So they've got to be following the path that we believe is the absolute best way for a high net worth investor to invest. So you do that, that eliminates I mean ninety five percent, right, And so for us, we're left with a very small group. But I think that's why our acquisitions tend to be so successful,
is that small group we're left with. They really really want to be at creative planning, and we really really want them to be at creative planning. And when we see a firm come in, we see their growth on average grow two to three hundred percent more, ninety nine hundred percent of their clients come over, their teams stay, people are happy, and and it's a big win for everybody.
It certainly sounds like it. So the firm has been a little more focused on creating content lately. That's something I've noticed over the past couple of years. You have a number of different employees posting, sending out market focused content. Tell us a little bit about how that became part of the firm's growth strategy and brand identity.
You know, well, there's this very inspiring guy, know that's that's built this brand around.
Yeah, but I stumbled backwards into that. It was never It began as just an itch. I had a scratch, and then you know, multiplied.
From Yeah, you and Josh have been incredible. But you know, I will say that for the longest time, I wrote every single newsletter, right, and I enjoy writing, and maybe did that for the first seventeen or eighteen years. A lot of work eighteen years, but it's a lot of work, and it's a lot of you. As you more and more things occupy your attention as a CEO, you've got to decide, well, what I don't want to do it
not do well. It turns out there's a lot of people that are smarter than me, right at creative planning, right, or.
At least better writers.
I'm sure somebody. Yeah. So so basically I said, I'm going to focus my attention on the books, which I really like writing and like the one that just came out, and then and the podcast So I've added more podcasts. I do a podcast every month with my friend Jonathan Clements. I do one every week with my friend Charlie Blello, who he's unbelievable.
So Jonathan clements with the Wall Street Journal for decades. That's right, great, great background. And Charlie Blello does some great chart work. I see his stuff on.
Twitter, one of the kings of Twitter.
Yeah, let's talk about the most recent book, Money Simplified. First of all, is Money all that complicated? Why does it need to be simplified? And second, tell us what else the book is about.
Well, I think it is incredible. I think it's more complicated it needs to be. I think there are a lot of people that don't understand it desperately want to understand it better, and I think there are a lot of people that are too embarrassed to admit they don't understand it. And so I wanted to write a book that basically, if you were teenager, you could pick it up and you could grasp most of the concepts and
understand it. If you were a beginner, you have a book that would really say, Okay, this is really going to help me. And if you're a very sophisticated person, but this just isn't your day job, that you could get through this book in thirty minutes and go you know what, I learned four or five things in here, and so I basically took all what I thought were the top like fifty sixty concepts of money and said, I'm going to explain this as simple as possible and
with pictures you know as well. And it's it's been well received. I've be happy with it.
Oh, that's great. Let's talk a little bit about the RIA industry. You always seem to describe it as a messy industry. Explain what you mean by that.
Oh, I think it's missing on so many different levels because a lot of people you think broker or RIA, so that all the independent advisors, their fiduciaries, all their firms are pretty similar. The firms couldn't be any more different. There are so many different offerings within the space, so many different ways of delivering, and the lines have gotten
you know, very very muddied. And also now with so much institutional money in the space, we see a lot of you know, the frank and firm concepts has really taken off in a big way too, so that you see some of the biggest rias are really no different than Morgan Stanley at this point. I mean, they have their own products, they have their duly registered and they're they're making money on commission. I mean literally to me, it may as well be Morgan Stanley. They's there's no
difference from from what you experience. And then some arias are just pure money managers, which is which is wonderful. We need money managers. Some of them are wealth management firms like Creative Planning, and some have multiple services, some don't. Some are roll ups, some aren't. Some share their brands,
some don't. It's it's very very messy as when you come into the space, you really have to spend some time if you're a client perspective client really trying to understand what you're looking for and who fits your needs. And if you're a firm and you're looking to sell, I mean when you look at the main buyers, most of them could not be any more different in their offering.
So you mentioned the phrase Frank is firm. I know exactly what you mean, but why don't you define what that is to the layperson who may not be so familiar with that phrase.
Yeah, So to me, a Frank and firm is just you know, you look, I look at Creative Planning. We spent fifteen years building something from scratch, right, so we built a very strong tree trunk. We knew what kind of tree it was, right, had branches, and then when we made acquisitions, we put branches on the tree that fit the tree right, and the people that were coming knew where they fit on that tree, and we knew
where they fit on that tree. But most of the large RaaS are really all acquisitions, right, from a very small they're very small firms, they started to acquisitions. So if you go to their fifty offices across the country, all fifty of them were acquisitions. So what do you get? You get fifty different leaders with fifty different ways of doing things, fifty different cultures, sometimes even different money management approaches.
It's an absolute mess, you know what I mean. I think because the industry has grown so much and so many people have made so much money in this industry that hasn't really been punished yet. But you know, in what industries it's punished eventually, all of them, right, Eventually, Eventually the Franken firms don't work out. Eventually the arms come falling off and the legs come falling off, and you just can't fix them when they get too big.
So let's talk about the genesis of that. Back in the twenty tens, not that far ago, in time when the ten year was yielding one and a half percent, when there was just no yield on any sort of fixed income rias were thrown off seven nine twelve percent a year. Three four times a week, I would get a phone call from some private equity shop. Hey, listen, we want to take a chunky We're looking to buy ten percent, We're looking to buy twenty percent. What's your
profit margin? We see your growth how much? And we're like, we're still really growing. We're not looking to sell anything yet, but call back in ten years, right. And I wonder, given the fact that we had zero interest rates for so long, I wonder how much those circumstances and all the private equity cash sloshing around led to the rise of all these francin firms.
Well, I think that's part of it, but I think it's way beyond that. It's a perfect storm of factors that really benefited the ra space. So number one, private equity likes to go where money is moving, right, and we've got money going from brokers to independence.
I mean that's been going off of fifteen to twenty years, and.
They love massive trends. Right, Hey, this is happening, It's going to continue to happen. This is a big thing in my favor. I can make a lot of mistakes in this will work out. You've actually seen that payoff with some private equity firms is they've made some of them made monumental mistakes. But even bad RaaS have done well because of that mega trend. The second mega trend is the transfer of wealth, the massive amount of wealth you know that's moving hands. Now that's also betting been
helping the RA space. A third trend is worth seeing consolidation in the space. So they like to be in the early innings of consolidation of every single industry. If you've got dentists consolidating, or HVAC company can sell. You know, if you've got one little company, it's worth you certain multiple of earnings, but if it's ten of those put together, it's worth more because the earnings are more diversified, they're more reliable. You only need one CFO, one hr person
all that stuff. So the RA space is highly fragmented, so they see a future if you look at the custodians it's not highly fragmented. There's two and a few others. Investment banks there's two and a few others. Brokerage houses there's a few, and then no one else. Right, they see the RA space is going to go through massive consolidation, and they're right, and we're seeing that now. And then you also see this massive trend of money moving from
smaller RaaS to the multi billion dollar ras. People going, look, I want to feel safe. So all of these trends are mega trends. On top of that, you put private equity loves recurring revenue, right, I'd rather buy Netflix and Apple where people are paying every month. And the money management business is a recurring revenue business, and every aspect of it is we do taxes, that's recurring revenue. You
have to file your taxes every year. We do bill pay that's recurring revenue if you pay bills every year. So they love that recurring revenue business. And then there's an inflation hedge right built in just magically. So you have all of these incredible trends that, look, you and I were not thinking about at all when we started, right, I was just saying, hey, how do I do this
in a better way tell clients. It was probably a good maybe twelve thirteen years before I got a call from anybody it even knew I had anything with any enterprise value whatsoever. I just thought, Hey, this is a great way to make, you know, make a living. I love what I'm doing all day. I've created this thing that seems to be going over very well. But PE has really flooded this space, particularly in the last seven or eight years, and they've been right.
So I wanted to come back to PE in a minute. But before we do that, let's talk about the solo practitioners or the small two, three, four, five person shop. You know, even with the wave of consolidation we saw in the twenty tens, there's still tens of thousands of small shops. I've heard some folks say they're all going away. That seems a little extreme. I've heard other people say this space is ripe for consolidation, mergers, acquisitions, et cetera.
How do you see the either the small firm or the solo practitioner over the next decade.
Well, I think there are some people in our in our space that love to say that everyone's going to get crushed and go away. And it's very self surveying.
Send us your mind, Yeah, exactly, come to us.
That's right. If you don't sell to us or hire me as you're a consultant or whatever, you're gonna die. That's ridiculous. There's room. You're gonna have to be better though, right, Like I think that, like you know, ten years ago, anybody could open a shop and do whatever. That world is going away, right, So I think what we're going to have is you're going to have my best guess on how this turns Out's like the tax world. Right, You're going to have one to four mega mega firms,
you'll have ten to twenty regional firms. You'll have a thousand smaller firms that either specialize in equestrian wealth management or dental wealth management, or they cost less than others, or it's a very very premium service, or you're just really really personable person and you're able to maintain a
practice that way. But it will be harder, and I think that it's going to be harder and harder to compete with the firm that's lowering their fees, providing more services, has access to investments that maybe you can't get, maybe can negotiate something with a third party, you can't negotiate, but there will be a home. It's just that the bar is going to rise, just as with bigger firms. For those big firms to thrive, the bar is going
to have to be higher. It's not going to just be as simple as buy a bunch of firms in the market goes up. I think that world's coming to an end too.
Really interesting. So you made the decision to work with a private equity shop to help fuel your acquisitions. Tell us a little bit about what that experience was.
Well, I mean, for us, we've never so General Atlantic is our minority owner. They own about seventeen percent of Creative Planning. They've been wonderful partners, but we've never used any money from them to do an acquisition. And the reality is, you know, we're the fastest growing area in the country, one of the large just ras in the country, and you know, that's a lot of eggs in one
person's basket. So the decision was basically made, Hey, we need to institutionalize this place and we need to reward the people that have come along on this journey. And so we brought in about five hundred employees are now partners and that's.
Oh really, I remember the last time you and I sat down, you were literally one hundred percent owner.
That's right.
There was no outside investment, that's right, No employees. You're morphing into something a little more employee owned.
Yes, five hundred, yea five hundred and many of them very very substantively. And then and then you've got General Anak in there. And then we brought in an institutional level CFO. We brought in Ernst and Young and and KPMG wanted to do our audit, wanted to do our tech. Basically just said, hey, look, we wanted the regulators to see, Look, we're taking this very seriously. We want our clients to see we're taking this very seriously. We were doing acquisitions.
We want somebody we're acquiring to see that as well. And it allowed for more easier internal succession in the event that something happens to me. And so there was was not motivated at all by using the capital at a third party to do anything, because they've never given us a dollar to do anything. They just bought into the company and that was it.
Any So it sounds like when you bring in an ian yan a KPMG that often is a predecessor step to going public. I don't get the sense that's the top of your list to become publicly traded.
No, it's not. I think that when you went in our scale, when we're negotiating with third parties to bring an investment to a client or to get something for a client, you know, sometimes the partner wants to see some information and that information coming from one of the Big four is a much bigger deal than if it's coming for like my buddy across town that does my taxes,
do you know what I mean? So that's really you know, institutionalizing so many things made it easier to do a lot of things, give a lot of people a lot of comfort, and that was a very very good decision. I have a lot of clients that I personally work with that are CEOs or CFOs of publicly traded company
and I will never do that. I mean, if I if we had to go public, you know, for the best interest of our partners and whatever, we had to go public, I mean, I would do what I had to do, but I would not be in that seat for you know, ten years. I wouldn't be able to do it pick chairman to a sacrifice.
Yeah, I could certainly see that being a challenge. So given where you are today, what are you looking at as the next leg of growth for creative planning?
Well, I think today like we are very strong with the very wealthy and with the mass affluent. We've got an emerging wealth division. We're strong in the phone case space, and we're strong with business owners. We're working towards getting stronger in the foundation uh space. And I think for us now, it's a question of just getting bigger locally, like where most of the places in the United States where you see a major sports team will have an office.
But we're still relatively small. I mean, the reality is we're small, So we only sound big when you compare us to RAS. But the brokerage houses you know, Morgan and Merrill and the investment ult Trillion Goldman, JP Morgan, the Custodian Schwabatfela, these are trillions and trillionah, They're all two to twelve billion, trillion trillion with a T right,
So we are a tiny, tiny fraction of that. We employ the same number of people as the high school close to my office, right, So in the ria space. It's significant, but it's not significant enough for the average American to know who creative planning is. And I think that's our objective is we want to be the gold standard nationally for the mass affluent and ultrafluent clients looking for an independent wealth manager.
So you rather famously you're known for not going to conferences. I have to ask, why is that? I really had to twist your arm to get you to go to the conference we did back in twenty nineteen. And I know you're coming to future Proof twenty twenty four in Huntington Beach in September, But why are you so down on conferences generally?
So I've really I kind of got this repeat from I can't maybe as Investment News or somebody did a story about this and they were asking competitors about me, and it was it was kind of like, well, they didn't say Peter is a jerk, it was, but it came across like, well, Peter's just like too big of a jerk to go to these conferences or something like that. But really, the I learned very early on from my clients. I learned so much from my clients that you know,
a yes to something is a note of something else. Right, So when you're committing to a conference, you're you're not usually committing like two days in advance, right, you're committing six months in advance. Right, That's right, And that's a big deal if you if you have kids, like I don't like to commit to things that are far in the future that I cannot move, right, And so I made that. That's part one of the decisions. The other part of the decision is I think and look, I
know you put on conferences. Yours are wonderful. Most of them suck, you know what I mean, Like most of the time you're going and everyone just really wants to get away from home and drink and hang out and go for a hike or go golfing or whatever. And I look at that, like two days or three days or four day and go, Man if I spent that twenty or thirty hours, uh, you know at night with my family and during the day with actual clients and employees one on one, where am I going to get
more value? I'm going to learn more, not not just serve people more. I'm going to learn more being present. So I have that attitude too. Now my youngest start graduating from high school. So I'm you know, I think the last what I agreed to do, I think was with you five years ago. That's right, And the next thing I'm about to do is with your colleague Josh here, with with.
Your with your right. The fun part about that, the whole thing is out doing Yeah, no, that looks that looks cool.
And you have I mean, that's the lineup of all lineups right that you have. So that's going to be very very interesting one and it's obviously a very different spin than everybody else. But I also know, you know, my kids aren't going to be home, right, so it's a much easier, easier thing to do for a couple of days.
So the secret is to plan conferences when Peter's children are otherwise occupied. Otherwise you get no shot. We did that very much on purpose, So I know I only have you for so much time. Before I get to my favorite questions I ask all my guests, I have to throw you a curveball question. You're a minority owner of the Kansas City Royals. I have to ask how that came about, because I know your background with them. How did you end up as a minority owner of a Major League Baseball team.
I mean this sounds cliche, but I mean when I was a little kid, I would literally listen to them to the radio while I was falling asleep. They used to start at seven thirty five PM all the time. There was none of this three o'clock game and weekdays or six o'clock GA. It was seven thirty five and they played till usually eleven. The games were really long. I'd listen to them every night. The Royals were amazing back then, George Brett, Frank White, Willie Wilson playing the
Yankees every year in the playoffs. Huge, huge, huge fan. And then in high school I wound up I talk to my dad and taking me out there to interview for a job. And I was interviewing. They're like, what do you want to do. I'm like, I want to be a bat boy for the Royals. I think I just started laughing, right. He's like, no, I thought You're interviewing, like do you want to sell peanuts or do you want to sell you know, strawberries? But what are you going to the aisles and sell? It's like I don't
want to do that. We're walking out and the guy yells he goes, Hey, I call the clubhouse and they have an opening for a clubby. I didn't know what a clubb he was. But the club he's the guys, like what cleans the shines the shoes for the players, does their lot. There's this whole route.
You literally do their laundry.
Yeah, literally do it. It's this is fascinating.
I delivered fried chicken at City Royal players. Was out during a game sitting on the bench.
That was That was Wade Bogs. That was the way Bogs they did that for but they Bruce It was. It's crazy and so but I was upset because the clubby job wasn't for the Royals, it was for the visiting clubhouse, and I was upset about that. But then I took the job, and it turns out you get to know all the Royals. Plus you get to meet all the players in the American League because you're playing every team in the American League and you were getting
tipped every series. So I was making a fortune, I mean a fortunate it's getting all these autographs, got to know all these players. But the routine before the game is nuts. I mean, they show up way earlier than most people. Think and hours hours hours ahead of time, and then they go and they you know, head and
field or whatever. Then they come in and they they drop all their law on the floor and they change their their cleats and then they get into their new you know, jerseys and new cleats, and then they go out and play the game, and you're shining their old cleats and washing their old jerseys, and then you're getting their lockers organized. Then you've got like the third eighty of the sixth inning to walk around the stadium. Then you're going and getting dinner ready for them and their beers.
Then after the game they all drink and eat and take their showers, do their interviews, and then they leave, and then you wash their clothes and shine their shoes, and organize their lockers and put the food away and drive the ones home that were you know, hammered and stayed late, and you take them to the Adams Mark Hotel across the streets. So when the Royals came for sale,
they were putting together a conglomerate in Kansas City. And I remember when John Sherman, who's the primary owner, he's the greatest guy, and he's like giving a walk you through I'm like, John, I don't need you to walk me through this deck, and he's like, I'm gonna walk you. I'm like, I'm one hundred percent in, Like I'm just Kansas City through and through, Royals through and through, and I just it was like a not even a thought about it.
All right, So let's jump to our favorite questions that we ask all our guests. Yeah, except I'm going to modify this because I know some things about you and two of these questions won't work for you. But let's start with who are your mentors who helped shape your career?
You know my mentors aren't you know, famous people. I really just early on got to work with somebody who has just had the most positive attitude in the world, and he was just so gracious with everybody around him. And I saw the impact that that had on everybody around him all the time, you know, with his with his family, as friends, his colleagues at work, and it really showed me, you know, how important that piece is
to the puzzle. He was not brilliant from a finance perspective, and I also worked with someone who was brilliant from a finance perspective but was not positive with the people around him, and the combination of the two was really the ultimate, you know, lesson. And I just combined that with my parents kind of that classic immigrant you know, work like crazy, love everything about your country all the time, no matter what I think, just that the positive attitude
my parents. Every wedding they left was always the best wedding they'd ever been to, right. And so I remember, right a girlfriend in college who were driving home and her parents were like making fun of something from some wedding we were out of. I've never heard anything like it, but that's like, turns out that's kind of normal, right, But just being around people that were so positive and so negative, so hyper both as the spectrum. I think
that was probably the biggest lesson for me. I don't think people need to have People always think they have to have a mentor. That's like I get calls all the time, well like you mentor me, Like, and I go, what does that mean?
Oh?
Well get a lunch every month? And you know you can't do that with everybody, right, right, But in the world you're we're in today, I mean a mentor could be on Twitter, do.
You mean right? Oh, you can absolutely have remote mens they don't have to they don't even have to know they're mentoring.
That's exactly correct, that's correctly.
And I've heard some stories about people who have said some people on the show have said, well, these three people have been my mentors. They have no idea about it, right, and it's really really interesting. So normally I would ask you what's keeping you into taine, what are you reading, what are you streaming? But with you, I want to ask tell me about the music shows you've been going to. What have you been doing in your evenings in your spare time.
So following you on Twitter, I know you're a big concert guy. It seems like your genre is like seventies is that pretty?
So I have really broad taste. It's the great Sarah McLaughlan too, like yeah, yeah, so so wow you really Yeah. So it's the Great American Songbook and everybody from El Fitzgerald to Frank Sinatra to classic rock to eighties and nineties to jazz to classical to blues, like even hip hop up until like my line in the sand is the Beastie Boys pull polls boutique. That's kind of where I stopped. But but I'll listen.
To Pope three years or something like that.
I'll listen to pop, I'll listen to Taylor Swift, any of the big singers. Yeah, what's your musical genre?
So it's been great having you know. So I used to own music stores in college, and I used to DJ even after college, weddings, everything else. And one of the things you do in a music story till the times you would just play every album that ever came in, right, So it became a very expansive list of things I would be willing to go to. And really, really the only genre I was not a big fan of that was major was country, but my kids have changed that
for me. So now I've been to Luke Cobs and Morgan Wallen, which would say we're the best concerts.
But those are very news.
That's not like that, not Hank Williams, right, right.
Very interesting. It's like country rock.
Right, David Allen Cob was pretty cool. But I mean most of the old old stuff is not is not for me, you.
Like, So when I think of Lennard Skinner to Woman Brothers or Marshall Tucker, those are old rock with the country. Well, you're describing his country with a rock influence correct, Yes, very yeah, I mean I could correct genre.
That's right. I used. I've used my daughter as a cover to go to the every Taylor swift concert that she's you have. Yeah.
So my favorite thing I saw on Twitter last week was and he told the story Home Breaks the Allans. The other day, Mohammed Alarian got all the women and the Swifties and his family in Paris to go see a show. And it was his wife, his daughters and a bunch of their friends. And the last minute, he said, somebody canceled, so he puts on a pink Sure, and he goes and somebody recognized him, took a photo of and it went a little viral.
I saw that, Actually, hilario, that is hilarious.
How many? How many? I would never have picked you for a Swiftie. Although I find her music fun and interesting.
Well, I think I think she's she's got to be the best all around artist of this generation.
Sure.
And the first time I went and saw my daughter was very very young, and it was her first tour, and I remember that I was like, Oh, there's this guy of guitar. He seems pretty interesting. That's opening. You know, no one was paying attention, right, and it was edgeering, it was was hilarious. Yeah, so, and so I got to see that and then I'm you know, you get a little nostalgic as you get older, so you start going to com or she wouldn't even go to when
these bands were around. Absolutely, So I'm doing that all the time too, Like Sarah Maclachlin's on my coundar the bleachers, who are they rolled out of fun? I know the bleacher you know. I'll go see Lionel Richie soon. Gotta go see Bruce Springsteen again.
Right, So are you gonna catch the Rolling Stones on this tour?
You know, I'm not a Rolling Stones.
I'm a Giant fan and I just don't want to go to Giant state.
Oh I'd like to see them play Sympathy for the Devil and then go home.
I saw them in Atlantic City on the Steel Wheels tour. It's like an eight thousand seat hall and it was it was awesome. But the bands that you might not have seen. I have this discussion with people all the time. Never hole an Oates fan. Yeah, we saw John Oates in like a time, like a four hundred seat room. He's like people who can fill stadiums. They are entertainers and they know how to entertain and you're getting a stadium show with five hundred people.
That's pretty awesome.
You know. We see Ricky Lee Jones every time she comes through town. Yeah, also small venue, she's amazing, Amy man Or go down the list.
So I love that. So Ario speedwack In it was touring. They're doing like huge you know, stadium arenas whatever, and but they most of these bands do like their opening shows kind of like a quiet practice show. So the beginning of their tour was in Salaina, Kansas, just like a tiny town five hours away, and they did this little arena that holds maybe I don't know, two thousand people, like Tony's Pizza Arena or something. So I went there.
My friends are like, they're coming to can't see. I mean, this is gonna be I was thinking, this is gonna be awesome, you know, just and sure enough it was just absolutely incredible.
Anytime you get to see a big name, yes in a small or even though like so, I haven't seen Journey, but I know they're but I'll tell you who. And again, a lot of this is sixties, seventies, eighties, I've seen Steve Miller a couple of times in small venues. He's amazing. We saw Peter Frampton. I mean, Frampton Comes Alive was the best selling live album for like, I don't know how many decades it may still as far as I know, that may still be the best selling live album of
all time. Seeing him in like with three thousand people, he was feeling, you know, giant. Who else have you seen?
Oh god, I'm just trying to think. I saw The Killers recently. That was one of my favorites for sure. They were incredible. I just saw last week a band called Cake, which is like.
A reluctantly crashed at the starting line. So comfort eagle.
They were amazing.
I have three or four albums of theirs, and they're all spectacular. That's right, spectacular. Let me let me give you the two that will make you jealous. John Fogerty at Radio City his open tour. By the way, his two sons are his backup band.
Oh that's cool. So I learned how old I was ding when I went to a couple of concerts. I saw Cheap Trick, who I think best rock and roll song of all time is Surrender. I'll die on this hill. But anyway, they were playing and the son, his son was the guitarist. And then the next week I saw the Eagles and as you know, Glenn Frey passed away, but his son replaced him and sounds like, sounds exactly like,
plays the same guitar. And then, oh gosh, then I saw the Food Fighters the next week and his daughter comes on and say, you know, Dave Grohl's daughter comes on and sings a song. I told my wife, I'm like, we are I am so old you know that I'm now watching like these bands kids play right there.
That's right. James Taylor brings his kids out to sing with him. He's got a son and a daughter.
And him about two months.
His tour is always great, the one that might make you jealous. I don't know if this is exactly you a genre, and I don't even know how I got these tickets. But at the Bowery Ballroom, which is like a basement that holds two hundred people, I saw Chrissy Hines and the Pretender.
Oh you know they're come and I can't say next month, can I.
Tell you something? Go see the show? She is great. The replacement musicians you got, They're just they're just really really awesome. And I'll see I'll see Steely Dan every time they come through town. Like, I'm definitely on the verge of you know, the boomer music. We just saw it. Neil Young at Forest Hills Outdoors always just great, what a great show. Yeah, all right, so so much with
fun with music. Let's jump to our last two questions that people seem to really like, which is what sort of advice would you give to a recent college grad interested in a career in either investment management or becoming an advisor?
So I would tell them pick your starting place very carefully, pick the firm that you're going to go to out of the beginning, because that can really start to dictate your destiny. Right, do you want to be in the brokera's side, do you want to be on the independent side. Do you enjoy sales? Do you enjoy advising? Really try to get to the right place as close to the
right role as possible. If you're given a choice like, hey, you can make X thousand dollars and be in this group, or you can make more and be in that group, choose the group that is more where you want to be In the long run, I found that proximity is a very big indicator of success. You know who y're around. Are you in the right company? Are you around the right people. If you're at the right company with the right people and you do the right things, great things
are going to happen. But you can do the right thing, be in the wrong company or not around the right people, it's not going to work. So those first decisions are really important.
Huh, really really interesting. And our final question, what do you know about the world of investment management, financial planning, building a firm entrepreneurship today that might have been helpful twenty five thirty years ago when you were first getting started.
Well, I think when I you know, when we started doing what we were doing twenty years ago, we were doing I set it up that I want to do all these things in one place now, this investment of lolosophy, because I thought it was the right thing to do for the client. I thought it was fun to give advice that way. The people really benefited from it, got a lot of positive feedback. But I didn't really think about it being an enterprise that became accidental and really
the effort to go Hey, this is an enterprise. We could really you know, grow this in that strategic way probably came about ten years later. You know, if I had a time machine, I would have made that light bulb go off on day one and accelerated a lot of things.
And I'm going to give you credit because you're the person who first put that idea in my head a couple of years ago, that you're not building a firm, You're building an enterprise and that's a big difference. Yes, thank you, Peter for being so generous with your time. We have been speaking with Peter Maluke, CEO and president of Creative Planning. If you enjoy this conversation, well check out any of the previous five hundred or so we've
done over the past ten years. You can find those at iTunes, Spotify, YouTube, Bloomberg, wherever you find your favorite podcasts. And check out At the Money, my new podcast, short ten minute conversations with experts about topics that affect you and your money, earning it, spending it, and most importantly investing it At the Money in the Masters in Business podcast feed. I would be remiss if I do not thank the Cracked team that helps put these conversations together
each week. Sarah Livesey is my audio engineer. Attika Valbrun is my project manager. Anna Luke is my producer. The head of Podcasts at Bloomberg is Sage Bauman. Sean Russo is my researcher. I'm Barry Ridolts. You've been listening to Masters in Business on Bloomberg Radio.