Creative Planning is expecting to significantly slow mergers and acquisitions activity following its 12th acquisition of the year, said CEO Peter Mallouk.
Wipfli Financial Advisors, the wealth and investment advisory arm of accounting and consultancy firm Wipfli LLC, will join Creative Planning along with $5 billion in assets under management, a mass-affluent focused wealthtech platform called Avid and a retirement advisory division with approximately $1 billion in assets under advisement.
In early June, Mallouk told WealthManagement.com he expected to see just one more “bold” M&A move in 2022, “that we think could really benefit our national mission.
“Otherwise,” he said, “we’re becoming even more selective as time goes on.”
Mallouk said on Tuesday that the Wipfli deal cleared the firm’s M&A pipeline for the foreseeable future. “If an incredible opportunity presents itself, we're going take advantage of that,” he said. “Otherwise, you know, we feel like we've done the major things that we wanted to do recently.”
The Wipfli Financial acquisition, he noted, checks virtually all the firm’s target boxes. With 95 employees in offices scattered across seven U.S. states, the new firm strengthens Creative Planning’s presence in existing geographical markets. At the same time, it adds capabilities and clients to retirement and mass-affluent services, both of which Creative Planning is actively developing.
As part of the latter effort, the best aspects of Avid will be merged with the best of Creative Planning’s "emerging wealth" platform, which the firm has been developing to serve mass-affluent clients since breaking into that market in 2017.
“We now manage several billion for the mass-affluent,” said Mallouk. “So, it’s gone really well for us. And it's a nice overlay with what they had in place.”
The goal, according to Wipfli Financial CEO Jeff Pierce, is to capture clients with between $500,000 and $10 million to invest, start them out on the integrated platform and shepherd them into increasingly higher income brackets and, ultimately, a different platform designed for high- and ultra-high net worth clients.
“Those two service offerings are going to combine very nicely,” Pierce said. “Still leading with financial planning and having access to similar investment vehicles to continue to invest those clients in—and then they can grow, and the business can grow with them as their needs evolve and change and get more complex.”
Pierce said he looks forward to taking advantage of Creative Planning’s menu of service offerings. “Not just the financial planning and investment management,” he said, “but also the ability to introduce a law firm with various areas of focus, especially on the estate planning side. And the trust company being at in-house is critical. Tax planning services and preparation capabilities was a big one. And then a smattering of all sorts of different subject matter experts that are available to our clients overall going forward.”
The Wipfli Financial acquisition also strengthens Creative Planning’s burgeoning retirement advisory arm, which nearly doubled its assets under advisement in early 2022 with the purchase of Lockton Companies’ $110 billion defined contribution practice.
Wipfli LLC will retain a “significant” minority ownership in the practice and existing offices will remain co-located with the accounting business, save for an administrative support team that will join Creative Planning headquarters in Overland Park, Kan.
“That was one of the unique things that we worked with Peter and the team on,” said Pierce. Since its founding in 1999, the Wipfli wealth management business had developed strong ties with its parent firm, he said, and it was important to maintain that collaborative relationship even as the corporate partition allows each to also focus more fully on diverging priorities and initiatives. “So, we will continue to co-locate.”
"This transaction creates a strategic relationship that will allow our clients to access a broad set of services through innovative financial platforms," Wipfli Board Chairman Kurt Gresens said.
According to Mallouk, facilitated access to Wipfli’s scaled accounting practice represents added value for Creative Planning as well.
With this latest acquisition, the third in roughly two months, Creative Planning manages or advises on over $225 billion in assets across all 50 states and 65 countries. While additional M&A is not entirely out of the question, Mallouk said the primary focus going forward will be on further development of existing capabilities and continued organic growth.
Terms of the deal were not disclosed, and closing is subject to certain approvals and conditions. Ardea Partners LP advised Wipfli Financial Advisors throughout the transaction, while Alston & Bird served as the firm’s legal counsel.