The country’s wealth gap is a perennial problem, one exacerbated by the COVID pandemic. A lack of access to resources that are needed to combat consistently low rates of financial education and literacy is often blamed for its persistence.
Peter Mallouk, President and CEO of Creative Planning, one of the country’s largest independent RIAs, is doing something about it.
Mallouk recently opened what he described as a state-of-the-art non-profit called Pathway Financial Education, which provides free financial education and training to small business owners and individuals, including children, in his hometown of Kansas City.
Located in the historic district of 18th and Vine, it’s part of a larger effort by the city to revitalize (not gentrify, Mallouk and city officials emphasize) the area, developing an economic base from within.
“It’s the jazz district of the city and close to downtown, but because of the violent crime, it feels like a world away,” Mallouk explained. “The city is committed to turning it around. I feel we’re in the right place in terms of the part of town we want to be in and the type of community that we want to help find a bridge to a better way.”
While Mallouk and Creative Planning have always been heavily involved in non-profit, charitable initiatives for the 10% of the population who struggle most, this one speaks to their specific strengths.
“Our expertise is wealth management,” he explained. “We have put together probably the largest aggregation of financial advisors, CPAs, and lawyers in the region. What if we took these professionals that work with the highest-net-worth people and have them train kids trying to figure stuff out and adults trying to start businesses? That’s how it came about.”
The city is guarded about maintaining the culture and history of the area, so securing the space took months. Yet, because it was such a good idea, he made “about six phone calls” and had all the funding he needed for the next few years. Corporate partners include Blackrock, the Kansas City Royals Charities, The Opus Group, JE Dunn, and Dimensional.
He’s now focused on getting the word out about its existence and convincing those in the community of the real-world difference it can make.
The curriculum
The curriculum covers everything from the basics of a budget to starting and running a business.
- For kids, it’s explaining how money works and how to avoid the things that can get them into trouble early on, like credit card debt.
- For adults, it’s more practical and focused on how to get a resume written, the job interview, how to get a promotion, and how to get out of debt.
“For business owners, it’s a different deal. We’ve got accountants, lawyers, and financial planners that are all part of it. The idea there is figuring out if the business is a good idea and how it’s tested without spending a bunch of money. How do you know where it should be located? How should it be legally structured, and what should the budget look like? It’s practical and hands-on, and if it’s strong enough, we want to mentor them through the process.”
Ultimately, he and his team hope to accomplish two things: No. 1, have success stories and actually make a difference. No. 2, make it a template, and other firms can take and adopt it in their communities.
“That’s the very ambitious part of it,” Mallouk concluded. “It might take us a while to get there, but that would be ideal, that we can replicate it with the help of other advisory firms.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
