Creative Planning's Mallouk challenges industry to protect employees

Creative Planning's Mallouk challenges industry to protect employees
The RIA pledges no layoffs or pay cuts resulting from economic fallout from COVID-19
APR 13, 2020

Peter Mallouk, president and chief executive of Creative Planning, has thrown down the gauntlet to the financial planning industry by pledging no layoffs or pay cuts resulting from any economic fallout from the coronavirus pandemic.

Mallouk, who made the commitment shortly after instituting a contingency plan a month ago that ordered all 700 employees to start working from home, doesn’t expect every advisory firm to follow his lead.

He believes, however, that an industry largely sheltered from the worst of the economic downturn through a predictable stream of fees based on assets under management should at least make an effort.

“We sent everybody home in mid-March and at that time I committed to the firm that we were not going to terminate or change anyone’s compensation regardless of how long this lasts,” he said. “I’m never going to have anyone work for me and worry about their job based on what’s happening in the economy.”

https://twitter.com/PeterMallouk/status/1249059345754701834

Mallouk added that even though he hasn’t heard of any other advisory firms making similar open-ended promises, “I think every major RIA should at least commit to protecting employees’ job and pay for six months or a year.”

Mallouk, who acquired Kansas City-based Creative Planning in 2004, made his commitment for the $45 billion firm public in response to suggestions on social media that advisers might have to start cutting fees in this difficult environment.

He repeated his statement on Twitter over the weekend in response to a post by Salesforce, stating it pledged no layoffs for 90 days.

“We’ve always had a plan in place to protect our employees because we knew there could be some event someday,” Mallouk said. “This puts the employees in a better position to take care of the clients because they’re not lying in bed at night thinking about their own job.”

Latest News

Raymond James, Osaic laud new bank partnerships
Raymond James, Osaic laud new bank partnerships

A Texas-based bank selects Raymond James for a $605 million program, while an OSJ with Osaic lures a storied institution in Ohio from LPL.

Bessent backpedals after blowback on 'privatizing Social Security' comments
Bessent backpedals after blowback on 'privatizing Social Security' comments

The Treasury Secretary's suggestion that Trump Savings Accounts could be used as a "backdoor" drew sharp criticisms from AARP and Democratic lawmakers.

Alternative investment winners and losers in wake of OBBBA
Alternative investment winners and losers in wake of OBBBA

Changes in legislation or additional laws historically have created opportunities for the alternative investment marketplace to expand.

Financial advisors often see clients seeking to retire early; Here's what they tell them
Financial advisors often see clients seeking to retire early; Here's what they tell them

Wealth managers highlight strategies for clients trying to retire before 65 without running out of money.

Robinhood beats Q2 profit estimates as business goes beyond YOLO trading
Robinhood beats Q2 profit estimates as business goes beyond YOLO trading

Shares of the online brokerage jumped as it reported a surge in trading, counting crypto transactions, though analysts remained largely unmoved.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.