Our US correspondent looks at the people and firms that made some of the most significant news during the past 12 months in North American wealth management. 

Creative Planning – Peter Mallouk’s Overland Park, Kansas-based firm fortified its position as a top-tier RIA, industry bellwether and leader as it gobbled up a half-dozen advisory firms to raise its AuM to about $390 billion; bought a retirement plan-focused company with $250 billion in client assets and ended the year with a bang, negotiating a reported entry into the UK. 

Industry executives believe Mallouk has positioned Creative to either initiate the long-awaited RIA mega-merger which will re-shape the industry or prepare for an initial public offering.

LPL Financial – The independent broker-dealer giant, led by aggressive new CEO Rich Steinmeier, took a very big swing this year, acquiring highly regarded rival Commonwealth Financial Network and pushing its AuM to a mind-bending $2 trillion-plus. LPL did, however, take some lumps on the deal, as an estimated 350 to 500 Commonwealth advisors defected, depressing LPL’s earnings and stock price. 

Undaunted, Steinmeier also took a minority stake in $41 billion OSJ (Office of Supervisory Jurisdiction) Private Advisor Group, bolstering its M&A capabilities. “LPL is a sleeping giant in the acquisition game,” said industry matchmaker Allen Darby, CEO of Alaris Acquisitions. “They can become the largest wealth management firm in the country if they execute, which I expect they will.”

Robinhood – No one can say Robinhood, led by super ambitious CEO Vlad Tenev, didn’t get the financial services industry’s full attention this year.

After making its mark by attracting 26 million customers to its mobile app, mostly younger active traders, the digital-first company’s disruptive expansion strategy was on full display. Robinhood closed its deal to acquire custodian TradePMR, also an RIA, and wasted no time launching a referral program aimed directly at poaching advisors from industry leaders Charles Schawb and Fidelity. 

Tenev was only just getting started. By year’s end Robinhood launched a social media platform; banking services; a crypto platform; options trading; and a venture capital fund giving investors access to privately held companies.

As if that weren’t enough, Tenev went all in on the booming predictions markets craze, giving consumers an opportunity to place bets on the outcomes of everything from football games to who will be the next Federal Reserve chairman.

“I believe we’re at the very beginning of a prediction market super cycle," Tenev said in an interview. “As it progresses, we should expect to see adoption and volumes continuing to grow, potentially into the trillions of contracts created each year.”

Have no doubt, as one Robinhood executive put it, these rollouts aren’t “for a niche. This is for the mass market.”

Focus Financial Partners – Private equity majority owner Clayton, Dublier & Rice is doing everything it can to make sure its 2023 investment (arguably at a very favorable multiple) in a pioneering aggregator pays off big time. 

Sparks flew initially as hard-charging CD&R operating partner Dan Glaser took over as the interim CEO before handing over the reins to Michael Nathanson, longtime head of Focus partner firm The Colony Group, working closely with Adam Birenbaum, CEO of Buckingham Wealth Partners, before ascending to Focus president. Their assignment wasn’t an easy one: try to get the 60 or so remaining ‘network’ firms to give up any semblance of independence and come on board as full-fledged “partner” firms that Focus owns outright.

As the year ended, CD&R apparently wasn’t happy with the pace of internal consolidation, although external M&A boosted RIA AuM to just under $200 billion while collective client assets across the board topped $500 billion. Nathanson was out as CEO, Birenbaum is in and Glaser is calling the shots. 

The consolidation moves also had industry-wide repercussions as rival Hightower, also private equity sponsored, followed suit later in the year. When a PE firm makes an acquisition, Glaser said publicly a year ago, “it always has a plan where the business will go.”