Creative Planning

Creative Planning, LLC
Company typePrivate
IndustryFinancial services
Founded1983; 41 years ago (1983)
Headquarters
Overland Park, Kansas
Area served
United States
Services
AUMUS$300 billion (2024)[1][2]
OwnerPeter Mallouk
Number of employees
2,100[3] (2023)
Websitecreativeplanning.com

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.[4]

History

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Early history and growth

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Creative Planning was founded in 1983[5] in Overland Park, Kansas, a suburb of Kansas City, Missouri.[6] The business initially operated as a small division within a larger financial services provider.[7] In 1999, Peter Mallouk began working as an estate planner for the firm[8] and performing other consulting functions in his capacity as an attorney.[9] He acquired Creative Planning in 2004.[8] The division was managing $34 million in assets at the time[10] and had around 30 clients.[9]

Mallouk focused on growing the firm organically.[11] 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.[12] In 2011, Creative Planning reached $2 billion in assets under management[13] with around 1,200 clients.[14] In 2014, Creative Planning surpassed $10 billion in assets under management.[15] 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."[16]

In 2015, Barron’s ranked Creative Planning as the country's top independent financial advisor.[17] By 2017, the company had grown its assets under management to $26.2 billion with advisors located in more than 30 states,[10] 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

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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.”[11]

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.[11]

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.[3][37]

Operations

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In February 2017, Creative Planning began plans to move its headquarters from Leawood, Kansas, back to Overland Park.[38] Since the move, the company has its headquarters located on a three-building campus on Interstate 435.[39][40] As of April 2022, the company has 1250 employees.[41] About 10% of the workforce began earning equity in the company in March 2021 when it began offering partnerships to its employees.[42]

As of December 2021, Creative Planning has $225 billion in assets under management and advertisement.[43]

References

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  1. ^ Kelly, Bruce (August 15, 2024). "Creative Planning hangs "Help Wanted" sign for advisors". Investment News. Retrieved September 13, 2024.
  2. ^ Mattlin, Ben (April 3, 2024). "Creative Planning Acquires ML&R Wealth Management". Online News for Financial Advisors, RIAs, Investment Advisors, Financial Planners and Wealth Managers. Retrieved September 13, 2024.
  3. ^ a b Son, Hugh (August 28, 2023). "Goldman Sachs unloads another business acquired under CEO David Solomon". CNBC.
  4. ^ Vogler, Adam (October 19, 2018). "Creative Planning settles in to its new HQ". Kansas City Business Journal. Retrieved April 27, 2021.
  5. ^ Welsch, Andrew (August 28, 2023). "Goldman Deal Supercharges Creative Planning's Growth". Barron's. Retrieved September 9, 2024. The company was founded in 1983 and Mallouk has led the firm since 2004.
  6. ^ "Long-term care policy preferable". The Kansas City Star. July 23, 1995 – via Nexis. This week: Stewart S. Koesten, CFP, Creative Planning Inc., Overland Park.
  7. ^ Paikert, Charles (October 2, 2023). "How Peter Mallouk, the man of the moment, rose to the top". Citywire RIA. Retrieved 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.
  8. ^ a b Kapur, Saranya (April 10, 2013). "Fastest Growing RIA: Creative Planning". Forbes. Retrieved September 9, 2024. Mallouk first worked for Creative Planning for five years as an estate planner before buying it in 2004.
  9. ^ a b Paikert, Charles (October 2, 2023). "How Peter Mallouk, the man of the moment, rose to the top". Citywire RIA. Retrieved 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.
  10. ^ a b Thomas Jr., Landon (June 21, 2017). "A Kansas Investment Firm Spurring Change on Wall Street". The New York Times. Retrieved October 25, 2018.
  11. ^ a b c Welsch, Andrew (August 28, 2023). "Goldman Deal Supercharges Creative Planning's Growth". Barron's. Retrieved September 9, 2024. In its early years, the firm focused on organic growth.
  12. ^ "The Top 100" (PDF). Barron's. August 27, 2007. Retrieved September 9, 2024.
  13. ^ 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. American City Business Journals – via Nexis. Leawood-based Creative Planning Inc. recently topped $2 billion in assets under management, quadrupling in size since 2008.
  14. ^ 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. American City Business Journals – via 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.
  15. ^ Dornbrook, James (April 4, 2014). "Leawood advisory firm tops $10B in assets". Kansas City Business Journal. American City Business Journals. After only 10 years in business, Leawood-based Creative Planning Inc. surpassed $10 billion in assets.
  16. ^ Dornbrook, James (April 4, 2014). "Leawood advisory firm tops $10B in assets". Kansas City Business Journal. American City Business Journals. 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.
  17. ^ Barthel, Matthew. "Independent Advisors: 2017's Top 100". www.barrons.com. Retrieved June 13, 2022.
  18. ^ Davis, Mark (July 13, 2016). "Financial writer Jonathan Clements joins Leawood-based Creative Planning". The Kansas City Star. Retrieved October 26, 2018.
  19. ^ Davis, Mark (September 19, 2018). "JoCo investment adviser fined $200K for radio ads with forbidden testimonials". Kansas City Star. Retrieved November 19, 2018.
  20. ^ "In the Matter of CREATIVE PLANNING, INC. AND PETER A. MALLOUK, Respondents" (PDF). U.S. Securities and Exchange Commission. September 18, 2018. Retrieved November 19, 2018.
  21. ^ Mallouk, Peter (September 18, 2018). "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". RIABiz. Retrieved November 19, 2018.
  22. ^ Welsch, Andrew (August 28, 2023). "Goldman Deal Supercharges Creative Planning's Growth". Barron's. Retrieved September 9, 2024. 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. ^ "Creative Planning makes first acquisition, adding $500 million in AUM". InvestmentNews. February 26, 2019. Retrieved June 11, 2024.
  24. ^ Snel, Ross (September 24, 2019). "Creative Planning Buys Low-Fee 401(k) Provider". Barron's. Retrieved September 9, 2024.
  25. ^ Snel, Ross (November 20, 2019). "Creative Planning Continues Down Acquisition Road". Barrons. Retrieved November 25, 2019.
  26. ^ Snel, Ross (February 10, 2020). "Creative Planning Taps Private Equity". Barrons. Archived from the original on June 25, 2020. Retrieved November 27, 2021.
  27. ^ Dornbrook, James (May 4, 2021). "Creative Planning's latest acquisition adds $5B in assets". Retrieved September 9, 2024.
  28. ^ Dornbrook, James (November 6, 2020). "Creative Planning's Mallouk is a Kansas City guy". Kansas City Business Journal. Archived from the original on November 6, 2020. Retrieved November 27, 2021.
  29. ^ "Creative Planning picks up Lockton's U.S. retirement business". InvestmentNews. November 11, 2021. Retrieved September 23, 2024.
  30. ^ Wenik, Ian (July 14, 2020). "Creative Planning buys $600m expat-focused RIA". Citywire. Retrieved September 23, 2024.
  31. ^ "Creative Planning Acquires Reilly Financial With $2B AUM". Financial Advisor. January 20, 2022. Retrieved October 1, 2024.
  32. ^ "Creative Planning Strikes Its First 2021 Deal, Opens Nonprofit". ThinkAdvisor. Retrieved June 13, 2022.
  33. ^ "Creative Planning launches nonprofit Pathway Financial Education". www.bizjournals.com. Retrieved June 13, 2022.
  34. ^ Dolan, Nicole (January 7, 2022). "Nearly a year after launch, Creative Planning nonprofit digs deeper into financial literacy". Retrieved September 9, 2024.
  35. ^ Garmhausen, Steve (November 3, 2021). "Creative Planning Achieves $100 Billion in Assets—and Aims for Much More". Barron's. Retrieved September 9, 2024.
  36. ^ a b Welsch, Andrew (June 5, 2023). "Creative Planning Buys $2.5B Wealth Management, Accounting Firm". Barron's. Retrieved September 9, 2024.
  37. ^ Welsch, Andrew (August 28, 2023). "Goldman Deal Supercharges Creative Planning's Growth". Barron's. Retrieved September 9, 2024.
  38. ^ Vockrodt, Steve (January 24, 2017). "Overland Park Council gives early thumbs up to prospective Creative Planning project". The Kansas City Star. Retrieved October 26, 2018.
  39. ^ Davis, Miranda (November 12, 2019). "Creative Planning will add third building to Overland Park campus". Kansas City Business Journal. Retrieved November 27, 2021.
  40. ^ Friestad, Thomas (September 8, 2020). "Creative Planning breaks ground on third office building on Overland Park campus". Kansas City Business Journal. Retrieved November 27, 2021.
  41. ^ "Three Creative Planning Wealth Managers Named to Barron's Top 100 Women Financial Advisors List". Creative Planning. June 23, 2021. Archived from the original on June 24, 2021. Retrieved November 27, 2021.
  42. ^ Dornbrook, James (March 9, 2021). "Creative Planning offers company equity to select employees". Kansas City Business Journal. Archived from the original on March 9, 2021. Retrieved November 27, 2021.
  43. ^ Garmhausen, Steve (November 3, 2021). "Creative Planning Achieves $100 Billion in Assets—and Aims for Much More". Barrons. Archived from the original on November 3, 2021. Retrieved November 27, 2021.
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