Creative Planning Explained

Creative Planning, LLC
Type:Private
Industry:Financial services
Hq Location City:Overland Park, Kansas
Area Served:United States
Aum: (2024)[1] [2]
Owner:Peter Mallouk
Num Employees:2,100
Num Employees Year:2023

Creative Planning, LLC is an independent wealth management firm and registered investment advisor majority owned by American financial advisor Peter Mallouk. The firm was founded in 1983, and is headquartered in Overland Park, Kansas.[3]

History

Early history and growth

Creative Planning was founded in 1983[4] in Overland Park, Kansas, a suburb of Kansas City, Missouri.[5] The business initially operated as a small division within a larger financial services provider.[6] In 1999, Peter Mallouk began working as an estate planner for the firm[7] and performing other consulting functions in his capacity as an attorney.[8] He acquired Creative Planning in 2004.[7] The division was managing $34 million in assets at the time[9] and had around 30 clients.[8]

Mallouk focused on growing the firm organically.[10] By 2007, Creative Planning's assets under management had expanded to $591 million and Barron's identified Mallouk as one of the country's top independent financial advisers.[11] In 2011, Creative Planning reached $2 billion in assets under management[12] with around 1,200 clients.[13] In 2014, Creative Planning surpassed $10 billion in assets under management.[14] The Kansas City Business Journal noted that Creative Planning's growth "occurred without making any acquisitions or having an affiliation with a trust company or bank."[15]

In 2015, Barron’s ranked Creative Planning as the country's top independent financial advisor.[16] By 2017, the company had grown its assets under management to $26.2 billion with advisors located in more than 30 states,[17] and clients in all 50 US states.[18]

In 2018, a $200,000 fine by the U.S. Securities and Exchange Commission against the firm was the result of a series of radio advertisements heard in live and pre-recorded broadcasts by a radio show host who was a client of the firm. The host gave testimonials for the firm in violation of the Investment Advisers Act of 1940. In addition to the fine, the firm was censured and agreed to a cease and desist order.[19] [20] Mallouk stated that he was unaware of the content of the ads. He was also fined $50,000 at the same time, for a failure to report investments by family members in the firm.[21]

Expansion and acquisitions

In February 2019, Creative Planning acquired The Johnston Group, a Minneapolis-based RIA that oversaw $500 million.[22] The deal was Creative Planning's first acquisition and represented a pivot from its strictly organic growth strategy.[23] In a statement, Mallouk said that other wealth management firms could "fit right into our model as we continue bringing fiduciary advice to Americans from coast to coast.”[10]

Two more acquisitions followed that same year—America’s Best 401k in September[24] and the McLean, Virginia-based OptiFour in November.[25] These deals expanded Creative Planning’s size and geographic reach.[10]

In February 2020, Creative Planning accepted its first outside capital when it sold a minority stake in the firm to General Atlantic, a private equity firm.[26] More acquisitions soon followed, including the Illinois-based Iron Financial with $6 billion in AUM and the Virginia-based Sullivan Bruyette Speros & Blayney with $5 billion in AUM.[27] By November 2020, Creative Planning had completed 11 acquisitions for a total of $7.2 billion in assets.[28] These deals and acquisitions that soon followed allowed Creative Planning to add or expand service offerings, including retirement plan services[29] and expatriate services.[30] [31]

In April 2021, Creative Planning launched Pathway Financial Education, a Kansas City-based nonprofit organization providing financial education to small business owners and under-resourced communities.[32] [33] BlackRock, Dimensional Fund Advisors, and other financial advisory firms backed the initiative.[34]

In November 2021, the firm announced that it surpassed $100 billion in assets under management.[35]

In June 2023, Creative Planning acquired BerganKDV, an accounting and wealth management firm with $2.5 billion in AUM.[36] Barron's noted that the deal "broadened the firm’s capabilities" with tax, auditing, and business advisory services.[36] In August 2023, Creative Planning agreed to acquire Goldman Sachs Personal Financial Management, which grew out of the investment bank's 2019 United Capital Financial Partners acquisition.[37] [38]

Operations

In February 2017, Creative Planning began plans to move its headquarters from Leawood, Kansas, back to Overland Park.[39] Since the move, the company has its headquarters located on a three-building campus on Interstate 435.[40] [41] As of April 2022, the company has 1250 employees.[42] About 10% of the workforce began earning equity in the company in March 2021 when it began offering partnerships to its employees.[43]

As of December 2021, Creative Planning has $225 billion in assets under management and advertisement.[44]

Notes and References

  1. Web site: Kelly . Bruce . Creative Planning hangs "Help Wanted" sign for advisors . Investment News . 15 August 2024 . 13 September 2024.
  2. Web site: Mattlin . Ben . Creative Planning Acquires ML&R Wealth Management . Online News for Financial Advisors, RIAs, Investment Advisors, Financial Planners and Wealth Managers . 3 April 2024 . 13 September 2024.
  3. Web site: Vogler. Adam. October 19, 2018. Creative Planning settles in to its new HQ. 2021-04-27. Kansas City Business Journal.
  4. News: Welsch. Andrew. August 28, 2023. Goldman Deal Supercharges Creative Planning’s Growth . September 9, 2024 . Barron's . The company was founded in 1983 and Mallouk has led the firm since 2004..
  5. News: Long-term care policy preferable . July 23, 1995 . . Nexis . This week: Stewart S. Koesten, CFP, Creative Planning Inc., Overland Park..
  6. Web site: Paikert . Charles . October 2, 2023 . How Peter Mallouk, the man of the moment, rose to the top . Citywire RIA. September 9, 2024 . Then another twist of fate: a childhood friend asked Mallouk to meet with his father, Dave Hokinson, who owned a financial services firm that specialized in life and disability insurance for doctors. The firm also had a small division called Creative Planning that helped clients with financial planning and asset management..
  7. News: Fastest Growing RIA: Creative Planning. Kapur. Saranya. April 10, 2013. Forbes. September 9, 2024. en . Mallouk first worked for Creative Planning for five years as an estate planner before buying it in 2004..
  8. Web site: Paikert . Charles . October 2, 2023 . How Peter Mallouk, the man of the moment, rose to the top . Citywire RIA. September 9, 2024 . The team that ran Creative Planning had left and Hokinson asked Mallouk to take a look at the operation, which had about 30 clients. ‘I don’t know why there was a whole team here,’ he told Hokinson. ‘I think I can do this myself.’ Mallouk began a six year stretch spent helping the doctor manage his office and doing portfolio management at Creative Planning using American Funds. At the same time, he was giving tax advice and drawing up estates and trusts for clients of financial advisors in Kansas City as an attorney..
  9. News: A Kansas Investment Firm Spurring Change on Wall Street. Thomas Jr.. Landon. June 21, 2017. The New York Times. October 25, 2018. en.
  10. News: Welsch. Andrew. August 28, 2023. Goldman Deal Supercharges Creative Planning’s Growth . September 9, 2024 . Barron's . In its early years, the firm focused on organic growth..
  11. News: August 27, 2007. The Top 100. Barron's. PDF . September 9, 2024.
  12. News: Dornbrook . James . April 8, 2011. Creative Planning sees client referrals pay off; Leawood-based adviser quadruples assets under management since 2008 . Kansas City Business Journal . . Nexis . Leawood-based Creative Planning Inc. recently topped $2 billion in assets under management, quadrupling in size since 2008..
  13. News: Dornbrook . James . April 8, 2011. Creative Planning sees client referrals pay off; Leawood-based adviser quadruples assets under management since 2008 . Kansas City Business Journal . . Nexis . Mallouk said the firm now has about 1,200 clients. It has gone from six advisers to 20 in the past two to three years and hired seven employees in the past four months..
  14. News: Dornbrook . James . April 4, 2014. Leawood advisory firm tops $10B in assets . Kansas City Business Journal . . After only 10 years in business, Leawood-based Creative Planning Inc. surpassed $10 billion in assets..
  15. News: Dornbrook . James . April 4, 2014. Leawood advisory firm tops $10B in assets . Kansas City Business Journal . . Creative Planning's growth occurred without making any acquisitions or having an affiliation with a trust company or bank. Instead, its success stems from a focus on investment performance, experienced people and an ability to offer comprehensive wealth management services..
  16. Web site: Barthel . Matthew . Independent Advisors: 2017's Top 100 . 2022-06-13 . www.barrons.com . en-US.
  17. News: A Kansas Investment Firm Spurring Change on Wall Street. Thomas Jr.. Landon. June 21, 2017. The New York Times. October 25, 2018. en.
  18. News: Financial writer Jonathan Clements joins Leawood-based Creative Planning. Davis. Mark. July 13, 2016. The Kansas City Star. October 26, 2018. en.
  19. News: Davis. Mark. JoCo investment adviser fined $200K for radio ads with forbidden testimonials. November 19, 2018. Kansas City Star. September 19, 2018.
  20. Web site: In the Matter of CREATIVE PLANNING, INC. AND PETER A. MALLOUK, Respondents. U.S. Securities and Exchange Commission. November 19, 2018. September 18, 2018.
  21. News: Mallouk. Peter. After settling with the SEC for $250,000 over two compliance issues, Peter Mallouk explains what he quietly and painfully experienced as his RIA grew from $15 billion to $36 billion. November 19, 2018. RIABiz. September 18, 2018.
  22. News: Welsch. Andrew. August 28, 2023. Goldman Deal Supercharges Creative Planning’s Growth . September 9, 2024 . Barron's . That strategy shifted in 2019 when Creative Planning made its first acquisition by buying The Johnston Group, a Minneapolis-based RIA that then oversaw $500 million. In a statement at the time of the acquisition, Mallouk said it was clear that there were other wealth management firms “that can fit right into our model as we continue bringing fiduciary advice to Americans from coast to coast.” More acquisitions followed, expanding Creative Planning’s size and geographic reach across the U.S..
  23. Web site: February 26, 2019 . Creative Planning makes first acquisition, adding $500 million in AUM . InvestmentNews . June 11, 2024.
  24. News: Snel. Ross. September 24, 2019. Creative Planning Buys Low-Fee 401(k) Provider. September 9, 2024. Barron's.
  25. News: Snel. Ross. November 20, 2019. Creative Planning Continues Down Acquisition Road. November 25, 2019 . Barrons.
  26. Web site: Snel. Ross. February 10, 2020. Creative Planning Taps Private Equity. live. 2021-11-27. Barrons. en-US. https://web.archive.org/web/20200625212041/https://www.barrons.com/articles/creative-planning-taps-private-equity-51581349150 . June 25, 2020.
  27. News: Dornbrook. James. May 4, 2021. Creative Planning's latest acquisition adds $5B in assets . September 9, 2024.
  28. Web site: Dornbrook. James. 2020-11-06. Creative Planning's Mallouk is a Kansas City guy. live. 2021-11-27. Kansas City Business Journal. https://web.archive.org/web/20201106130114/https://www.bizjournals.com/kansascity/news/2020/11/06/creative-planning-peter-mallouk.html . November 6, 2020.
  29. Web site: November 11, 2021 . Creative Planning picks up Lockton's U.S. retirement business . InvestmentNews . September 23, 2024.
  30. Web site: Wenik . Ian . July 14, 2020 . Creative Planning buys $600m expat-focused RIA . Citywire. September 23, 2024.
  31. News: January 20, 2022 . Creative Planning Acquires Reilly Financial With $2B AUM . October 1, 2024 . Financial Advisor.
  32. Web site: Creative Planning Strikes Its First 2021 Deal, Opens Nonprofit . 2022-06-13 . ThinkAdvisor.
  33. Web site: Creative Planning launches nonprofit Pathway Financial Education . 2022-06-13 . www.bizjournals.com.
  34. News: Dolan. Nicole. January 7, 2022. Nearly a year after launch, Creative Planning nonprofit digs deeper into financial literacy . September 9, 2024.
  35. News: Garmhausen. Steve. November 3, 2021. Creative Planning Achieves $100 Billion in Assets—and Aims for Much More. September 9, 2024 . Barron's.
  36. News: Welsch. Andrew. June 5, 2023. Creative Planning Buys $2.5B Wealth Management, Accounting Firm . September 9, 2024 . Barron's.
  37. Web site: Son . Hugh . August 28, 2023 . Goldman Sachs unloads another business acquired under CEO David Solomon . CNBC.
  38. News: Welsch. Andrew. August 28, 2023. Goldman Deal Supercharges Creative Planning’s Growth . September 9, 2024 . Barron's.
  39. News: Overland Park Council gives early thumbs up to prospective Creative Planning project. Vockrodt. Steve. January 24, 2017. The Kansas City Star. October 26, 2018. en.
  40. Web site: Davis. Miranda. 2019-11-12. Creative Planning will add third building to Overland Park campus. 2021-11-27. Kansas City Business Journal.
  41. Web site: Friestad. Thomas. 2020-09-08. Creative Planning breaks ground on third office building on Overland Park campus. 2021-11-27. Kansas City Business Journal.
  42. Web site: 2021-06-23. Three Creative Planning Wealth Managers Named to Barron's Top 100 Women Financial Advisors List. live. 2021-11-27. Creative Planning. en-US. https://web.archive.org/web/20210624165321/https://creativeplanning.com/press-room/three-creative-planning-wealth-managers-named-to-barrons-top-100-women-financial-advisors-list/ . June 24, 2021 .
  43. Web site: Dornbrook. James. 2021-03-09. Creative Planning offers company equity to select employees. live. 2021-11-27. Kansas City Business Journal. https://web.archive.org/web/20210309200752/https://www.bizjournals.com/kansascity/news/2021/03/09/creative-planning-peter-mallouk-equity-offering.html . March 9, 2021.
  44. Web site: Garmhausen. Steve. November 3, 2021. Creative Planning Achieves $100 Billion in Assets—and Aims for Much More. live. 2021-11-27. Barrons. en-US. https://web.archive.org/web/20211103132026/https://www.barrons.com/advisor/articles/creative-planning-peter-mallouk-100-billion-51635944258 . November 3, 2021.

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