International wealth management group Kingswood is looking to replicate its UK advice market success in Ireland.
In September 2022, the firm bought Dublin-based financial advice firm MMPI for an undisclosed sum to enter the Irish wealth market.
David Lawrence, Kingswood Group chief executive, told International Adviser that similarities between the UK and Ireland advice markets made it an “appealing” opportunity for the business.
“The regulatory environment is very similar to that in the UK and there’s also a lot of features of the market that are very similar to the UK,” he said. “There’s over 700 IFAs, which for a country the size of Ireland, is a lot. They have the same issues as small IFAs in the UK – there’s a lot of regulation and bureaucracy. So, the opportunity to consolidate in Ireland remains attractive just as it is in the UK.
“There’s a great trend to seek advice and investment solutions from IFA firms, which perhaps hasn’t been the case in the past. I think clients are moving away from traditional banks, who have served most needs, into other firms keen to serve, and as such, creates an attractive opportunity to go into the country.
“Ireland is starting to go through a similar sequence of challenges and opportunities that the UK has seen in the last 10 years or so. You can almost look at it through the rear-view mirror and think we’ve experienced some of that already. We can anticipate it happening and therefore have some corporate memory that can be helpfully applied to it.
“As a consequence of that, we believe that we can accelerate our footprint and presence in Ireland quite well.”
Acquisition spree
Kingswood has become a name in the UK synonymous with acquisitions in the advice market. This is something that the firm hopes to do in the Ireland wealth industry.
“We hope to build an acquisition pipeline in Ireland, and in a not dissimilar way that we’ve done in the UK,” Lawrence told IA. “MMPI, in relative terms, is quite a large financial advice business in Ireland. There’s a lot of opportunity to bolt on other firms into it.
“We see that as a very active opportunity, in the short term, to build a bigger business in Ireland through inorganic or acquisition activity.”
This spree comes at a time when it secured a debt facility worth a possible £150m ($169m, €172m) with an unnamed ‘leading global financial institution’. Kingswood said the funding will bolster its strategic growth plans and provide additional capital to fund future acquisitions – including Ireland.
Therefore, Kingswood has a lot of backing to complete many deals in Ireland and the UK.
Lawrence added: “We see continued great opportunity in the UK, we’ve got a really strong pipeline today. We continue to get into exclusivity with additional firms on an ongoing basis. We will hopefully replicate the same in Ireland. It’s simply a case of how much appetite we have, and which ones are the best opportunities.
“It may be that an Irish opportunity is far more appealing than a UK opportunity, or vice versa, depending on how they arise. But it’s not different and the sprees will be seen together. We’ll create an acquisition pipeline that today is all UK companies, but maybe in the future, we have deals prepared in Ireland and the UK.
“I think maximum reach is gained by being as local as you possibly can be. In the same way, we’re very actively trying to widen our footprint in the UK and in Ireland.”
Expats
The entry into the Ireland market opens up several areas of possibilities, including offering services for UK and Irish expats.
But, for the time being, Kingswood does not believe the Irish operation will intertwine with the UK arm like that.
Lawrence said: “We haven’t actually thought about expats. There may well be an opportunity, but we’ve looked at Ireland as a jurisdiction or a country and thought there’s more in common than less in common. There’s an opportunity that needs maturing; we recognise it as such and have experience of tackling this from the work we’ve done in the UK.
“We’ve seen it very much as a standalone enterprise. However, once we’ve completed on the transaction and brought it into the business, we will look for other opportunities as we always do. But we haven’t bought it with any sort of crossover intent.
“We do think from a product and other capability perspective, there is quite a lot of cross fertilisation.
“We believe we can actively distribute our model portfolio service with IBOSS through the business in Ireland. Some of their products could become complementary to ours as well.”
EU passporting
The Irish acquisition also gives Kingswood the opportunity to use EU passporting rules and offer services across the bloc.
But again, Lawrence was keen to downplay expansive growth plans in the short term.
“We need to walk before we can run,” he added. “Adventuring into Ireland is a big deal for us in its own right.
“There’s an opportunity to get the Irish business fully embedded into our business, and to set it on a path for growth. It’s not lost on us that it creates a passport opportunity into the broader EU, but we’re not actively thinking about doing that in the short term.”
