Creative Planning, a $45 billion-plus RIA based in Overland, Kansas, is on a roll, announcing its fourth acquisition this year, and likely to announce another one or two before the year-end, according to CEO Peter Mallouk.
Its latest acquisition announcement, for Hogan Financial Management, a Milwaukee-based RIA with approximately $300 million in AUM, comes just two weeks after its last acquisition announcement. Terms of the latest deal were not disclosed but like all previous purchases, it is self-financed, and the seller approached Creative Planning rather than the other way around.
Mallouk says he’s been fielding calls from dozens of firms looking to be acquired for the purposes of succession and/or as a result of competitive pressures at a time when RIA valuations are strong. (The firm does not have an M&A team.)
Smaller RIAs are experiencing “serious competitive pressures” from national RIAs firms and from custodians as well, says Mallouk, adding that their margins are being squeezed by costs for technology, compliance and personnel.
RIA relationships with their custodians are also coming under pressure, according to Mallouk. “Will they be paying for custodian services in two years?” Or will they receive reduced services?