S4 BARRON’S September 16, 2019
WHAT
PRICE
GROWTH?
C
REATIVE PLANNING’S
growth rate is the stuff of
dreams for most indepen-
dent financial firms. Since 2016,
the Kansas-based registered in-
vestment advisory, or RIA, firm
has nearly tripled the client assets
that it manages, to just over $42
billion.
What’s more, the growth is
overwhelmingly organic, meaning
that it hails from individual cus-
tomers opening or expanding in-
vestment relationships with the
firm, rather than from mergers
and acquisitions of other advisory
There’s an M&A boom among independent advisors.
How much is too much?
firms. These firms love organic
growth because the client assets
tend to be more “sticky” than
those added through M&A.
But Creative Planning’s growth
hasn’t come without complications.
Last September, it was fined
$250,000 by the Securities and
Exchange Commission over radio-
advertisement violations, along
with a lesser infraction. Then, in
May, came news that the firm had
parted ways with its “chief of in-
vestor psychology,” celebrity life
coach Tony Robbins. The move
followed sexual-misconduct allega-
tions against Robbins, which Rob-
bins has denied.
Creative’s experience highlights
the fine line that RIA firms have
to walk as their industry consoli-
dates at light speed. There’s a
quest for scale that will let firms
deliver a high-end client experi-
ence at a reasonable cost—but
there’s also the possibility that
growth outpaces a firm’s ability to
handle the rate of change.
“One of the challenges high-
growth firms face is that you need
to be that much better at running
an organization,” says David De-
Voe, managing partner at San
Francisco–based investment bank
DeVoe & Co. “Firms moving into
the high-growth space [should
remember] the old mantra, ‘What
got you here won’t get you there.’ ”
By Steve Garmhausen
SPECIAL REPORT | 2019 TOP INDEPENDENT ADVISORS ILLUSTRATION BY IRENA GRAJIC