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Wealth firm losses triple on staff exits and restructure

Wealth firm losses triple on staff exits and restructure

Losses at Kingswood blew out from £1 million to £3 million last year as an ongoing restructuring caused an £800,000 drag on revenue and ‘senior staff departure’ costs cost a further £500,000.

The balance sheet was further hit by a £1 million cost associated with the recognition of borrowing on the company books, and with the expense of the 2017 takeover of the debt-laden European Wealth business from its former executives, as they struggled to remain current on a loan.

Kingswood had earlier this month issued a profit warning as ‘a result of additional investment expenditure’.

Shares, which fell 3.8% to a record low of 10p following the announcement, were this morning unchanged on the day at 8.1p.

Chief executive Gary Wilder (pictured) took over management of the company following the departure of predecessor Marianne Ismail in January. He said that alongside chief executive of Kingwood’s operating platforms, Patrick Goulding, he was confident that the business now had a firm base for growth.

‘Since Patrick Goulding and I have taken over day-to-day management control at the board's request earlier this year, we have now implemented the significant changes that were originally planned.

‘I am pleased with the future direction of the company and believe a strong foundation is now in place from which to grow the platform and add value for shareholders.

He added: ‘We have a strong competitive advantage with our integrated wealth planning and investment management platform.

‘We plan to leverage the platform to its full potential and are looking to expand our current product offering with turn-key opportunities such as mortgages, cash management and lending products, including the launch of Kingswood labelled products in partnership with best in class industry expertise.’

Alongside South African asset manager Anchor Capital, acting as manager to Mauritian investment company Astoria, Kingswood took effective control of European Wealth in mid-2017, as the former executive team struggled to meet debt obligations.

Wilder is a founding partner of ultimate parent company Kingswood Property Finance.

Ismail had initiated a radical restructure of the business, consolidating smaller portfolios. She also began to move staff into central hubs to make management and the sharing of information easier. 

Total advisory and discretionary assets in its private client division fell from £900 million to £800 million in the period, which ended at the market low of late December 2018. Assets in its fixed income division climbed 10% to £700 million, however.

The company has grown its planning business with the acquisition of financial advisers Marchant McKechnie in Yorkshire late last year and Oxford-based Thomas & Co in early 2019.

It also hired former hedge fund boss Najib Canaan to spearhead a North American expansion last month.




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