Creative Planning, a registered investment advisor (RIA) headquartered in Overland Park, Kan., has acquired Memphis, Tenn.-based Telarray Advisors, an RIA overseeing about $1 billion in client assets, the company said.
According to the Telarray website, co-founders Cliff Paessler and Andy Shaul launched the company as an accounting practice in 1993 with $30 million in client assets, doubling it the following year. It transitioned into being an advisory firm to assist its tax advisory clients on their broader financial planning issues.
In 2017, Richard Paessler, son of co-founder Cliff Paessler, became president of Telarray after joining the firm in 2011 as chief compliance officer and chief marketing officer.
As Telarray, a fee-only practice, the firm offers retirement planning, estate planning, investing, tax management strategies, executive compensation, and risk management. In 2021 the firm hit a milestone with $1 billion of client assets under management (AUM).
“Partnering with Creative Planning is a perfect match for Telarray,” he said. “We were looking for a firm that aligned with us in planning philosophy, culture, employee opportunities, and that provides an immediate expansion in our service offering for both our existing and future clients. Creative is that partner, and we are excited to be a part of the team.”
In an email, Paessler discussed his practice and how it worked with new clients seeking its help to improve their financial lives.
“Portfolios of new clients with no previous advice tend to have more random allocations, with concentrations in higher-risk investments than is appropriate for their family and goals,” he said. “We never tell clients they have made a mistake, only that there is more opportunity and efficiency available to them."
Financial Advisor asked Paessler how the firm's younger investors approached building an investment portfolio on their own before turning to Telarray for financial advice.
“Younger investors tend to trend towards “exciting” investments,” he said. “Crypto, hot stocks, even physical assets like gold and silver are very common. That said, we work with a number of younger investors who are dedicated and disciplined in their approach and understand what long-term really means as an investor.”
Paessler said the firm has always been a fee-only practice, minimizing any potential conflict of interest as a fiduciary to its clients.
“This also frees up the team to really tune into client needs with appropriate resources, deepen their relationships, and understand the goals they have for their life to a level of detail that just is not possible if you are always thinking about your next sale,” he said in the email.
In a news release, Creative Planning CEO Peter Mallouk said that the Telarray acquisition would help his firm expand its regional footprint.
“Creative Planning is thrilled to bring on the Telarray team, who will help us break deeper into the Tennessee market,” Mallouk said. “It was evident from very early on in our discussions that Telarray’s attention to detail, prioritization of clients’ needs, and overall work ethic would make a great addition to our team.”
In a separate email, Mallouk discussed his company’s approach to selecting prospective M&A partners. Asked how Creative Planning has managed to stay competitive in the current marketplace, he said his firm remained focused on partnering with practices that were already independent, rather than partnering with those seeking their independence.
“Yes, brokerage firm advisors are going independent at a higher rate, but this has not impacted Creative as we never bring on brokers or breakaway groups,” he said. “They tend not to match our mission or culture. We have always purchased other independent advisors, and we have never had as many ongoing discussions as we do today.”
Financial Advisor asked Mallouk what Creative Planning offered a prospective M&A partner that its team could not achieve alone as an independent practice.
“We built a very comprehensive suite of services from scratch,” he said. “By partnering with Creative Planning, a firm like Telarray can immediately offer their clients access to planning specialists and services that make a meaningful difference.”
Financial Advisor asked Mallouk if Creative Planning required prospective M&A partners to manage a minimum amount of client assets.
“Our bias is towards firms with a billion or more in AUM, but we will acquire smaller firms that fill specific needs,” he said.
According to an August 8, 2022 Form ADV filed with the U.S. Securities and Exchange Commission (SEC), Creative Planning reported having $130,496,986,446 in discretionary assets under management. With the company’s latest acquisition of Telarray Advisors, Investor.com reports that as of March 14, 2023, Creative Planning currently manages $133.8 billion in assets and provides investment advisory services for 55,811 clients nationwide.