FPT: David, tell me a little about your career and how you came to be involved with Kingswood. Was it an opportunity you were looking for?

DL: I spent over 30 years with Lloyds Banking Group, the last eight of which were in executive roles across Lloyds Private Banking. I played a lead role in establishing Schroders Personal Wealth (Schroders Financial Planning arm) – a joint venture between Lloyds Banking Group and Schroders – and that experience sharpened my entrepreneurial curiosity. When Kingswood approached me to initially lead their UK wealth business, I thought it was an exciting opportunity to use my skills and experience to propel a rapidly growing firm to the next level and took the position.

FPT: Kingswood has been on the acquisition trail for the past two years at some pace. Why was this strategy chosen, how many firms have you acquired and how many more do you plan to acquire?

DL: The business embarked on an acquisition strategy back in 2019 and when I joined Kingswood it had purchased four businesses. This strategy was formed out of a clear opportunity to take advantage of consolidation opportunities and create growth. The strategy has been referred to as “buy and build” which is a good descriptor as we are buying growing businesses, and then actively support their further growth. I have accelerated this focus since arriving, making 10 further acquisitions to date. Nine of these have been Financial Planning businesses, with one asset manager, IBOSS, which provided us with an internal DFM proposition with open market distribution. We currently have operational capacity to acquire around 10 businesses per year but this is not a target as we are open to opportunities as they arise.              

FPT: How are the acquisitions being funded and what is the long term goal? Do you see Kingswood eventually being acquired itself by a bigger operator?

DL: We have great support from Pollen Street Capital who have funded most of our acquisition activity to date. As an AiM listed business, we have lots of funding choices and as we wish to continue to acquire at pace over time, we may look to diversify sources of capital. We have a clear plan to build a leading wealth management business ourselves and being acquired by someone else is not part of our thinking.  

FPT: What are you looking for in an advice firm in terms of suitable acquisition targets and do you reject many firms?

DL: Cultural fit is the most important aspect. Beyond that, we are typically seeking firms that have unfulfilled appetite for growth where we can invest and firms that have a similar focus on clients and colleagues to ourselves. We do reject some firms, although as most of the firms we acquire are broker introduced, the broker typically filters those businesses that don’t fit with our model before we get into a process.        

FPT: Do firms take on the Kingswood brand or do they operate independently?

DL: We fully integrate all financial advice firms under the Kingswood brand. However, the pace of this and how we do it is typically agreed collaboratively with the sellers to ensure there is no client dislocation. 

FPT: How many staff and advisers does Kingswood now employ and what is the annual turnover and profit?

DL: We have approaching 300 staff and 90 financial advisers. Our annual results to December 2021 showed an operating profit of £6.3m from a turnover of £150m. We expect to do materially better that this year, in part due to the number of acquisitions made.      

FPT: I know you like to deal personally with the purchases and meet each firm - why is that and is that becoming a harder job as Kingswood grows?

DL: When I first joined, I wanted firms looking to sell to hear about Kingswood directly from me and I still lead all initial conversations. This is becoming practically more difficult as we grow, but it is important, so I plan to continue to adopt this approach where I can. 

FPT: Unusually you have a growing US advice operation. Can you tell me a bit more about this and how does it fit into the overall operation? What are the plans for the US? Can you also explain how your investment arm works?

DL: The US is the largest wealth management market in the world. While it exhibits different features to the UK, both markets are fragmented and offer consolidation opportunities. There is little overlap between the UK and US businesses; the US business is ostensibly an autonomous business.

Our UK investment management business provides DFM solutions ranging from Model Portfolios to more tailored, personalised solutions. We have a vertically integrated model internally but also distribute to over 100 IFA firms across the UK too.     

FPT: What do you see as the prospects for the Financial Planning market. Do you think the app generation will eventually turn to human advisers or is this generation moving in a different direction and, if so, how will you reach them?

DL: I am excited about the prospects for the Financial Planning market. The advice gap is well documented and firms such as Kingswood can do their bit to address this. Accessibility of advice is undoubtedly improved by digitisation, and firms needs to be able to meet the needs of different attitudinal groups, but I don’t think there is a substitute for a human adviser.     

FPT: What do you think of hybrid advice and is this something you are looking at. If so, how would it fit in with your Financial Planning interests?

DL: We are looking at hybrid advice, particularly for simpler needs. The fit here is complementary to our other propositions and we see them co-existing to allow us maximum client reach. 

FPT: What are your long term goals personally and for the business?

DL: I am laser focused on building a business that becomes a recognised name in the industry for client centricity and progressive ways to break some of the taboos such as pricing. My personal goals and those of Kingswood are fully aligned in that respect.  

FPT: How do you like to relax outside work?

DL: When not in London, I’m at my family home which is on the edge of the Peak District and as a keen road cyclist, that is my principle way of relaxing and keeping fit.  

FPT: Can you name one thing that would surprise people about you?

DL: I come from a musical family and played piano, violin and flute to a reasonably high level. I now only play the piano, purely for leisure. 

David has worked in financial services for over 30 years including with Lloyds Banking Group latterly as chief operating officer and commercial director for Lloyds Private Banking. He played a key role in the establishment of Schroders Personal Wealth, becoming chief commercial officer for Schroders business in March 2019. He joined Kingswood Group in December 2020.

https://www.kingswood-group.com/