One of the big Financial Planning stories of the week was the merger announced of two of the more significant players in the wealth management / Financial Planning space: Mattioli Woods and Kingswood.

But will this be a marriage made in heaven or was it more of a shotgun wedding? I suspect a bit of both.

Leicester-based Mattioli Woods is the bigger partner: 1,000 staff and £16bn under management. London-based Kingswood has 300 staff and about £10bn under management.

Both firms are managed and advised by their majority owners, the private equity group Pollen Street Capital.

It’s an interesting deal in a number of ways. Mostly private equity groups, increasingly a key player in the Financial Planning sector, tend to keep brands and firms they have acquired separate and independent. One of the aims of private equity sector is, of course, to build up equity value and sell on or seek some other way to unlock value after a several years of ownership. Mergers, on the other hand, if badly handled can erode value.

However, in this case Pollen Street clearly thought the two businesses would be better off together and they may well be right.

Mattioli Woods, best known as primarily a SIPP provider, has branched into wealth management and Financial Planning over the past few years with some success. Despite this it remains a relatively small player in wealth management.

Kingswood has hit the buffers in recent times and had to raise capital quickly at times to pay off debt. Rapid expansion has drained its resources and it has needed to seek new funds to keep going. Despite this it remains a significant force in Financial Planning and has acquired many Financial Planning firms, although fewer lately due to its financial challenges.

Bringing the two together creates a combined group with over £25bn under management and some 1,300 staff - although no doubt there will be a review and a hunt for “efficiencies”.

I suspect there will be further efforts by other private equity owners to bring other Financial Planning and Wealth Management firms together. The Fidelius and Timothy James deal, also announced this week, is similar in nature although the two brands will remain separate.

Long term, whether these business marriages will work remains to be seen. In this case, Mattioli is the bigger partner so presumably will be in the driving seat. Kingswood is smaller but has lot to offer.

Of more significance to the profession is the growing number of mergers and consolidations. I don’t think these mark weakness, but rather a logical evolution and some sensible business moves.

They will need, however, to put Financial Planning first and thoughts of world domination second.

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Kevin O’Donnell is editor of Financial Planning Today and a journalist with 40 years of experience in finance, business and mainstream news. This topical comment on the Financial Planning news appears most weeks, usually on Fridays but occasionally other days.  Email: This email address is being protected from spambots. You need JavaScript enabled to view it. Follow @FPT_Kevin 

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