Creative Planning CEO and president Peter Mallouk said the giant registered investment advisor with $245 billion in client assets is building three lanes for the several hundred financial advisors and staff at the newly acquired RIA Personal Financial Management to allow them to move comfortably to Creative Planning in the next few months.
The first lane is simply to stay put at Personal Financial Management, which has about 70 offices and financial advisors who work with $29 billion in client assets, Mallouk said. He called the first option "United Capital 2.0."
The next is to work under the roof of Creative Planning, which has a deliberate, one-firm process for its advisors. And last, financial advisors may set up their own RIA, if they are so inclined.
“We’ll wind up with two completely separate RIAs,” Mallouk said in an interview on Tuesday. “I’m not interested in having the biggest RIA in the United States. I’m interested in running the best RIA in the United States.”
Last week, Goldman Sachs Group Inc. said it was selling Personal Financial Management to Creative Planning. Terms of the deal were not disclosed. Goldman bought the RIA, formerly United Capital Financial Partners, in 2019 for $750 million in cash.
In the interview, Mallouk acknowledged that the financial advisors at Personal Financial Management were "tired" after being involved in multiple deals over the past several years.
"Now that they see the group of options, I sense more relief," he said.
One industry executive said Creative Planning's varied strategy for the old United Capital advisors was unusual.
"This is very outside the box," said Jodie Papike, president of Cross-Search, a recruiting firm. "I've never heard of a firm being so flexible. The opportunity for advisors to have their own RIA surprises me the most."
"I have more questions about that," Papike added, including who would be in charge of compliance and what would be the benefit to the advisor of having his or her own firm.
Mallouk said that the deal to acquire the RIA from Goldman Sachs was a fast process, taking just eight days to reach an agreement. He didn't speak to all 70 or so Personal Financial Management offices but did get a chance to discuss the transaction with 40 offices of advisors and about 120 people.
After that process, he realized the acquisition wouldn't work if all the advisors were moved inside Creative Planning and the Personal Financial Management RIA were to be shut down.
"The clients and the advisors need to be happy," Mallouk said.
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.
