Creative Planning Strikes Its Biggest Deal to Date

Mallouk told ThinkAdvisor the firm will continue to look for more acquisitions, ones that strengthen its presence in major markets, include new offices in secondary markets and with firms that share its culture, investment approach and focus on financial planning.

RIA Dealmaking

Creative Planning's latest purchase follows the most active month on record for M&A activity in the RIA space, according to DeVoe & Co, which recorded 29 transactions in January.

This dealmaking level sets the stage for 50 or more transactions in the first quarter, which would top the record-setting 40 transactions in the third quarter of 2020.

"This unprecedented volume is being driven by COVID's succession wakeup call, high valuations and seller's interest in gaining the power of scale," said David DeVoe, the firm's founder and CEO, in a statement.

Among the firms with multiple acquisitions in January were Mercer Advisors, Beacon Pointe, Hightower and CAPTRUST, which each acquired two or more RIAs.

DeVoe does not expect "this extreme level of activity" to continue for several months or quarters. If there were more than 30 transactions a month, valuations would likely decline, leaving "some sellers without their favorite buyers," he said.

Excluding sellers with more than $5 billion in assets, the average AUM of sellers in January RIA acquisition deals was $958 million, according to DeVoe, slightly less than the $1.02 billion average for all of 2020.