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Peter Mallouk Photo credit: Janie Jones
Peter Mallouk

Creative Planning Acquires $2.5B AUM BerganKDV

The deal may be the largest acquisition of a CPA firm by an RIA, and brings 600 new employees and $2.5 billion in client assets to Creative Planning. It will be the foundation for a business-focused service division within the firm.

Creative Planning has acquired a professional services company in Bloomington, Minn., with 600 employees, $2.5 billion in client assets and multiple business lines.

Led by CEO Dave Hinnenkamp, BerganKDV was founded in 2015 with the merger of CPA firm Bergan Paulsen, business information technology firm Networking Solutions and KDV (Kern, DeWenter & Viere), which provided 401(k) planning and consultation, investment banking services, trust and estate planning, and individual investment management and financial planning.

Terms of the deal were not disclosed, but cash and equity were both exchanged, said Creative Planning CEO Peter Mallouk.

The acquisition, when combined with other services Creative Planning already has, is the foundation for Creative Planning for Business, overseen by Hinnenkamp. Creative Planning for Business offers an array of business, financial and technology services for companies, including data forensics, tax and auditing, accounting and advice.

“We've been trying to grow our national footprint and focus on being as strong as we possibly can for high-net-worth families and business owners,” Mallouk said, noting that BerganKDV serves a very similar client base.

“Bergan overlaps in a lot of areas,” he said. “We're able to build out our strengths in a lot of our key areas like wealth management, 401(k) and tax, but they also add a breadth and depth to our business offering and that's what makes it even more exciting.”

Mallouk said BerganKDV teams will bolster Creative Planning’s existing IT consulting, investment banking, valuations and tax divisions, while also adding things like payroll and auditing services.  

“There are going to be some new additions, but, for the most part, this is a coming together of a lot of offerings we already had for business owners,” he said.

John Langston, managing partner at boutique investment bank Republic Capital Group, worked with Creative Planning to put the deal together. He believes it to be among the largest CPA acquisitions ever made by an RIA and said it’s unique because Creative Planning isn’t looking to gain referrals from Bergan’s tax division.  

“Creative Planning has tons of referrals and tons of business already, they’re one of the fastest growing firms in the country,” he said. “What they're doing is different. They're saying they need more capacity and want to increase their delivery, not only on taxes, but technology consulting and all the different things they can help with.”

Langston said Creative Planning tends to hit capacity quickly each time the firm adds a new service, simply due to demand from existing clients. He added that he thinks more firms should be looking seriously at expanding services as the industry matures.

“Clients are asking for this; they need this,” he said. “It doesn't mean that every firm should try to do everything—I don't think that's necessary—but I think it's the biggest trend in wealth management.”

With nine office locations, primarily in the upper Midwest, BerganKDV serves a little more than 1,000 wealth management clients, including more than 100 retirement plans, according to a Form ADV filed last September.

“I think they're really trying to figure out the same thing we are,” said Mallouk. “How do they offer this full suite of services to their clients? I think they just saw we were a little further down the field in this regard, and it would give their team members more opportunities, different roles they could take, different parts of the country they could be in if they wanted to.

“Our growth rate opens up a lot of room for promotions, too,” he added. “It was really good for their team, but their clients—overnight—also get a lot more breadth and depth of an overall offering.”

“We’ve always strived to fulfill our mission—to be capable of caring for our clients through their entire business, organizational and personal life cycles,” Hinnenkamp said in a statement. “Joining Peter and his Creative Planning team greatly accelerates us along our path to deliver on this mission.”

Founded in 1983, Creative Planning is owned by parent company CPI HoldCo B and has its headquarters in Overland Park, Kan.

After its acquisition of Wipfli Financial Advisors last summer—a move to bolster retirement planning and tech capabilities—Creative Planning ended the year with more than $210 billion in client and retirement plan assets across all 50 states and 65 countries.

Earlier this year, the firm picked up $1 billion AUM Telarray in Memphis and established its first physical office in Tennessee.

“You can expect to see a couple more key acquisitions before year-end,” Mallouk said. “We're trying to be selective, but things that can make a substantive difference for our clients and team.”

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