Ranked No. 3 on Barron’s 2023 list of top RIA firms, Overland Park, Kan.-based Creative Planning has grown to become one of the nation’s largest RIAs.
Established in 1983, Creative Planning had all of $100 million in assets in 2004. Thanks to organic growth, and more recently, an emphasis on dealmaking, the firm today manages $170 billion in assets and oversees about $315 billion including assets under advisement, says Peter Mallouk, founder and president.
In April, Creative Planning acquired ML&R Wealth Management, a Texas RIA with $2.2 billion in assets under management. Last November it purchased Mesirow’s $13 billion corporate retirement advisory unit and a month earlier acquired Berwyn, Pa.-based RIA Kistler-Tiffany Advisors. Last summer, Creative Planning made a splash when it announced the acquisition of the former United Capital business from Goldman Sachs.
On this Barron’s the Way Forward podcast, Mallouk discusses where the wealth management industry is headed, his company’s M&A strategy, and the time that he failed to procure chicken for the ‘Chicken Man,’ Boston Red Sox star Wade Boggs, who insisted upon eating poultry before every game. Below are highlights from the conversation:
More information means more need for financial advisors. “One of the fascinating things about this time that applies to finance, and life in general, is I think 100 years from now when they’re writing about this period in the history books, they’re going to say, ‘There was more information available to people than at any time in history and people became dumber.’ The quality of information and the misinformation and the little pieces of information where you’re missing other things. That applies to the real world and it applies to finance. I think that’s one of the reasons why you’re still going to see people needing advisors. And maybe the way that advice is delivered and what we have to do for the client will be different, but they’re going to need advisors more than ever.”
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Creative Planning’s M&A strategy. “Our main story has been organic growth and the best three years we’ve ever had of organic growth have been the last three years. But we have supplemented it with M&A. The idea for us for M&A is we want to become more localized to the clients. If somebody calls us and they’re in Naples, Florida, or they’re in San Francisco, or they’re in Cleveland, we want to have a team there that can serve them. While we have a presence in almost every major market in the U.S., what we’ve been able to do is acquire, usually, smaller firms that join our local office to increase our local profile, making it easier for us to serve clients locally.”
Implementing a consistent process to serve clients’ needs. “I want it to be like going to a top hospital in the U.S. where you’re trying to figure out what’s going on and that hospital has technology and protocol and systems and a process to uncover what your issues are. And then we figure out, ‘What’s the custom way to treat that patient?’ And so Creative Planning, same thing. We’ve got billionaires as clients. We’ve got people who’ve got a million dollars. We’re going through a process to make sure nothing gets missed and that we can then identify the right custom solutions to that particular client.”
Worrying that investors aren’t worried. “This is probably the most at peace clients have been in a long time. They’ve been through a lot starting with 2008-2009 and then going through all this stuff, be it tariffs, wars, weird, crazy elections, social unrest, and Covid. It’s been a nonstop saga. In this period where we’re worried about inflation but the markets are generally doing good, the average investor is more positive than they’ve been in a long time. But as we know, that tends to be a lagging indicator. I hope that’s not the case here.”
The time when he worked in the visitors’ clubhouse for the Kansas City Royals and unintentionally deprived notoriously superstitious Boston Red Sox star Wade Boggs of chicken. “Boggs wouldn’t step on the baseline coming onto the field and things like that. But he also had to have chicken before the game. So they sent me out to buy chicken for him before these games, because apparently in the stadium at the time, they didn’t have whatever it was he wanted. One time I was actually doing this, and I ran out of gas. I literally just stood on the side of the road. He did not get his chicken. He was not upset at me at all. But my boss was extremely upset at me, because it was also his car I ran out of gas in. So, yeah, that was not a good day for me.”
