This midwestern city’s entrepreneurial roots helped it develop a thriving wealth management community.Destination 2016: DenverDestination 2016: Nashville
Visit Kansas City, Mo., today and you’ll find a population that’s excited to be there. There’s new development, a low cost of living and plenty of job prospects for the millennials moving in after graduating from nearby universities. To people who don’t know much about the city, this could come as a surprise. But in some ways, Kansas City is vibrant now because of its past. It has been a center of industry since the 1800s, when railroads running through the area made it possible to ship livestock and crops from the Midwestern states to the coasts. Then interstate highways came, and the city established itself as a transportation hub for the trucking industry.
It is also a center of wealth management. Financial Advisor included three Kansas City–area financial firms among the top 20 RIAs in the country in 2015. Combined, they manage around $34 billion. That wealth reflects Kansas City’s business appeal, and is in turn a part of what makes KC such a compelling city.
Mayor James Sly at SXSW festival © Heather Kennedy/Getty Images; Kauffman Center for the Performing Arts © Timothy Hursley; Downtown Kansas City © David Arbogast; Marty Bicknell, CEO of Mariner Holdings © Ryan Nicholson; Royals celebrate 2015 World Series win © Alex Trautwig/Getty Images
Diversity is at the core of Kansas City’s success. “If you consider the makeup of the Kansas City economy, it is a reflection of the U.S. economy,” says Tim Cowden, president of the Kansas City Area Development Council. “In that diversity lies strength.”
The city’s success stories span industries. National brands, such as Hallmark Cards and H&R Block, financial institutions including American Century Investments and technology companies such as Garmin and Cerner, a healthcare IT firm, were all founded in Kansas City. Google chose Kansas City, Kan.—essentially a suburb of Kansas City, Mo.—as the first community to have access to its ultrafast Google Fiber network in 2011. The city beat out 1,100 other applicants vying for the service. The high-speed internet, and the enthusiasm it brought to the city, spawned more growth. Google has since expanded the service across the Kansas City area. The network “attracted a new generation of innovative startups, which drew from the community’s entrepreneurial culture and heritage,” says Kansas City mayor Sly James. “We’re doing things in Kansas City today to support those new companies and further build on that culture.”
That’s part of Kansas City’s DNA: The city is supportive of innovation, friendly to new entrepreneurs and has a culture that attracts young people to move there and fuel its workforce. With success comes affluence, and thus Kansas City’s wealth management community has grown. Established entities such as American Century, an investment manager with approximately $150 billion AUM that specializes in mutual funds, have been around for decades. But in recent years they’ve been joined by others, including Creative Planning, an investment management firm with over $15 billion AUM that’s seen tremendous growth since CEO Peter Mallouk took over in 2004, and Mariner Wealth Advisors, a company that started in 2006 targeting high net worth individuals in Kansas City before expanding by acquiring stakes in wealth advisory firms across the country.
“We’re not a city like a Boston or a New York that has money managers on every corner,” says Mark Gilstrap, chief people officer of American Century. “But I think the business community and our region have been factors that draw talent for a lot of functions of money management firms. Over the years we’ve had a strong pool of talent from the region.”
Marty Bicknell, CEO of Mariner Holdings (the parent company of Mariner Wealth Advisors and Montage Investments), attributes some of his company’s success to Kansas City’s history of supporting new companies. “Success here created opportunities for people to splinter and create significant entities themselves,” Bicknell says. “I think it’s unique to this market. In our first year of business, people didn’t say, ‘But your company’s only a year old.’ It was just accepted that it was okay to be a new company.”
Technological advances have made it less important to be in one of the major money management centers of the United States. “Thirty years ago you needed to be in New York, Chicago or LA,” says Gary Cloud, SVP and co-chief investment officer, fixed income at FCI Advisors. “As technology has allowed for the decentralization of financial information, you don’t have to be in one of these big financial centers to put together an investment plan.”
And for Kansas City companies expanding outside of the city, being Midwestern has been an advantage. “It goes back to the core fundamental values that make our economy successful,” says the KCADC’s Cowden. “When you’re talking about advising individuals, wherever they may be, the Midwestern ethics of good, solid planning and treating your customer right help that industry grow as well.”
Kansas City’s support of new businesses makes entrepreneurs who start their companies in Kansas City want to stay there—and to help make it a better place to live. From the entrepreneurship-focused Ewing Marion Kauffman Foundation, founded by the pharmaceutical magnate who also brought the Royals to Kansas City, to H&R Block cofounder Henry Bloch’s Marion and Henry Bloch Family Foundation, to the Stowers Institute for Medical Research, started by American Century Investments founder James Stowers Jr., major Kansas City players historically have made significant donations in the city where they started out. “Many of our foundations are the result of the entrepreneurial culture of Kansas City,” says Mayor James. “They represent the heritage of generosity by wealthy Kansas Citians.”
For up-and-coming players like Mariner’s Bicknell, who credits some of his success to the strong mentors he found in the Kansas City business community, it’s important to pay it forward. “We have an early-stage private equity fund that invests in local companies,” he says. “Not exclusively—but significantly—in local companies. The give-back nature of the community here has had a significant impact on me and on Mariner.”
This article originally appeared in the 2016 June/July issue of Worth.
After being selected as the first U.S. Google Fiber city, Kansas City, Kan., attracted startups in droves for its ultra high-speed internet. This influx spawned Startup Village, which provides office space, community and Google Fiber service to about 25 companies in a range of industries. Kansas City Startup Foundation, the entrepreneurship-focused Kauffman Foundation and Sprint are all supporters. kcstartupvillage.org
Launched in early 2016, this investment fund raises money from local investors and helps connect area entrepreneurs to prominent VCs. When those VCs make an investment, KCRise matches 20 percent of the amount with local funds—an effort designed to help risk-averse locals invest in their community. Darcy Howe, who spent 30 years in the Merrill Lynch private banking and investment group and is now an angel investor, helms the fund. As of April, KCRise had already raised $13 million of its $20 million goal for 2016. Darcy Howe, managing director, email@example.com, kcrising.com
For a getaway outside city limits, turn to the Elms Hotel & Spa, about half an hour from Kansas City. The area’s mineral-rich springs have drawn tourists since the 1800s, and the Elms recently underwent a $20 million renovation. 401 Regent St., Excelsior Springs, firstname.lastname@example.org, 816.630 .5500, elmshotelandspa.com
The 122-room, 10-suite Hotel Sorella has been attracting guests for its rooftop pool and on-site spa since it opened in 2013. Its Mediterranean-focused restaurant, Rosso, and accompanying Bar Rosso, set on the top floor, overlook Country Club Plaza. 901 W. 48th Place, 816.753.8800, hotel-sorella-countryclubplaza.com
This Italian Renaissance Revival-style building was rebranded as the Raphael Hotel in 1975. The boutique property completed an extensive renovation to its 126 rooms and suites in 2010. Raphael’s restaurant, Chaz on the Plaza, offers regional cuisine. 325 Ward Parkway, 816.997.9267, raphaelkc.com
A local fixture since the 1920s, Arthur Bryant’s has perfected burnt ends, the BBQ dish named for the end pieces of brisket that are more bark than meat, tossed with K.C.-style barbecue sauce (tomato-based and sweetened with molasses). Go hungry and prepared to wait. 1727 Brooklyn Ave., 816.231.1123; 1702 Village West Parkway, 913.788.7500, arthurbryantsbbq.com
Husband-and-wife co-owners Colby and Megan Garrelts celebrated Bluestem’s 10th anniversary with a major renovation in 2014. Winner of the James Beard Award for best chef in the Midwest in 2013, Bluestem was nominated for outstanding restaurant in 2015 and 2016. 900 Westport Road, 816.561.1101 bluestemkc.com
Eat a strip steak and listen to live music at the Majestic Restaurant, housed in a former saloon downtown. Reserve a table on the lower level, which was a speakeasy during Prohibition and has live jazz performances every night. 931 Broadway Blvd., 816.221.1888, majestickc.com
Designed by Israeli architect Moshe Safdie, the Kauffman Center opened in 2011. It houses the Kansas City Symphony, Lyric Opera of Kansas City and the Kansas City Jazz Orchestra. 1601 Broadway Blvd. email@example.com, 816.994 .7200, kauffmancenter.org
The stunning neoclassical main building and the Steven Holl– designed Bloch Building over-look a lawn with 18-foot-tall shuttlecock sculptures. Inside, the museum houses more than 35,000 works. A current $11.7 million renovation will accommodate the Marion and Henry Bloch Collection of Impressionist and Post-Impressionist art that will go on display in 2017. 4525 Oak St., firstname.lastname@example.org, 816.751.1278, nelson-atkins.org
The Kansas City Royals won the World Series in 2015 for only the second time ever. With powerhouse players, such as Mike Moustakas and Lorenzo Cain, now is the time to see them play. For suite information: email@example.com, royals.com