Overland Park, Kan.-based Creative Planning Inc., an RIA with $200 billion in assets, said today it purchased Paradigm Financial Advisors, a St. Louis firm with $600 million in assets under management.

The terms of the deal were not disclosed. Though Creative Planning is partially backed by minority shareholder private equity firm General Atlantic, the firm’s acquisitions are funded mostly from cash, according to Peter Mallouk, the company’s CEO.

Jim Reding is the owner of Paradigm, as well as a lawyer and member of the Missouri Bar Association. According to the companies’ joint press release, he’s now an equity partner with Creative Planning, and he will be managing director in the St. Louis office.

In an interview with Financial Advisor, Mallouk said that Paradigm’s tax and estate planning expertise were a draw, and Paradigm also adds 15 new employees, including eight advisors, to the Creative Planning staff. The purchase furthermore added new physical office space in St. Louis, where the firm already had clients and a team.

“It’s the closest major metropolitan area to Kansas City,” he said. “It allowed us to almost double our client base in that market and allowed us to establish a physical presence all at the same time.” The firm now has a total of 1,200 people and 400 advisors, he said.

The acquisition follows on the heels of Creative Planning’s acquisition of Reilly Financial Advisors, a La Mesa, Calif., firm, two weeks ago. Reilly had $2 billion in assets under management. Last year, Creative Planning bought Sullivan, Bruyette, Speros & Blayney, its biggest private wealth acquisition, which brought in $5 billion in assets.

At the end of 2021, Creative Planning also made a major splash in the retirement plan provider space by partnering with Lockton, a plan provider with $100 billion in assets under advisement. Mallouk generally agrees that it’s been a strategy among some big retirement plan providers to consolidate with private wealth firms to pair offerings for plan participants once they reach a certain level of wealth.

“What we’re seeing in the retirement space is there’s a consolidation of retirement firms,” he said. “If you look at other things … property and casualty and benefits, the consolidation in that space is far, far ahead of where the 401(k) space is and where the private wealth space is. And so I think you see that property and casualty and benefits are consolidating to just five or 10 firms nationally. And that’s pretty much all that’s going to be that’s left. And the 401(k) [space] is heading in that direction. Private wealth is laggy. But that massive consolidation means you’re only going to wind up with a few players in each of these spaces.

“We made the decision that [retirement plans and wealth management] go hand in hand … and decided to make an intentional commitment to that space.”

He said that when it comes to looking for acquisition partners, “We eliminate 95% of the firms we’re talking to, we just don’t get past the first call, because we’re focused on the culture.”

Paradigm had a big emphasis on legal work and had a strong tax team, Mallouk said. "These guys were pretty similar to us."

Creative Planning started acquiring three years ago, Mallouk said, and has picked up 24 firms, and the firm now has 55 offices across the United States. Mallouk owns about 80% of the firm, while General Atlantic owns 18%, he said. About 200 employees will have ownership stakes after the latest deal, he said.

Echelon Partners was Paradigm's investment banker in the deal.