The London-listed wealth management group has been on an M&A spree, acquiring a number of firms across the UK and in the US. It says that it has seven further prospects in its pipeline.

UK-listed Kingswood, which has bought a string of wealth management firms over recent months, has completed its acquisition of Smith Pearman and Associates, a business with more than £70 million ($85.8 million) servicing the Hampshire and Surrey counties.

Smith Pearman and Associates, which was founded 35 years ago, caters to more than 240 clients. The firm serves high net worth individuals with an existing portfolio, or new investment requirements, based on personal goals and aspirations.

The acquisition follows five UK acquisitions completed by Kingswood since the start of 2022, including Allots Financial Services, a financial advisory firm based in Rotherham; Joseph R Lamb Financial Advisers, a long-established advisory business based in Essex; DJ Cooke Life and Pensions, an independent financial planning business servicing clients across South Yorkshire; AiM Independent Financial advisors, an independent financial advice business based in Eastleigh; and Vincent & Co Ltd, a privately owned independent financial advisor firm based in Lincolnshire.

“This deal also reinforces our presence in Hampshire, building on our recent acquisition of AiM Independent and creating a sustainable hub in the region,” David Lawrence, chief executive at Kingswood Holdings, said. 

More deals are on the way, he continued: “Looking ahead, we maintain a healthy acquisition pipeline and are currently in exclusive due diligence talks for a further seven potential acquisitions. Our near-term target is to build our UK AuM and AuA [assets under administration] in excess of £10 billion in the UK and £14 billion globally.”

Consolidation drive
Kingswood's M&A drive is not unique, it is a sign of the push for economies of scale as firms seek to handle rising regulatory burdens and demands from clients for new services and digital capabilities. In late March, in one of the largest transactions of recent months, Royal Bank of Canada announced that it had agreed an all-cash purchase of the UK’s Brewin Dolphin in a deal valuing the latter at about £1.6 billion ($2.1 billion). Recent years have seen developments such as Lloyds Banking Group’s wealth joint venture with Schroders, the Tilney/Smith & Williamson merger (the new entity is now called Evelyn Partners), Old Mutual Wealth's purchase of Quilter Cheviot, and JP Morgan’s purchase of Nutmeg, the robo-advisor platform.

Kingswood posted record levels of revenue and operating profit in 2021. Revenue reached £149.7 million, surging by 488 per cent from a year before; operating profit increased by £5.5 million to £6.3 million, as firms in the UK and US were integrated. Some businesses adopt a “consolidator” strategy. Examples include UK-based Succession Wealth, which has bought a raft of firms. For example, in January it bought IFA firm Pannells Financial Planning, adding £1.4 billion of client assets. Other acquired groups include Winchester-based JCF Financial Services and Chippenham-based Bankhouse Financial Management.