Radar Results, M&A consultants to the financial planning industry, recommend the use of specialist lawyers who have experience with financial planning transactions. Principal for Radar Results, John Birt, stated that he had seen many sales either stumble or drag out or just fail because lawyers involved in the deal were not experienced. Birt said, “We […]
Radar Results has produced its 6 monthly Valuation Guide for those practices and client registers sold since May 2012. The most notable change has been the surge in demand for accounting practices, notably those that do not already offer financial planning services. The opportunity for financial planners to acquire an accounting practice and then market […]
Radar Results has provided financial planners with more than 500 business appraisals since 2006. An analysis of this information indicates that larger practices tend to be more profitable and efficient, with clients paying on average a far higher level of fee. Only those practices that had annual recurring revenue of at least $500,000 were included […]
Recently Radar Results conducted a simple poll among the LinkedIn group called ‘Selling or buying a financial planning practice Australia’, and received 103 responses. The single question asked was “What multiple or recurring revenue today would you pay for a quality financial planning (FP) business?” There was a lot of debate over what might be […]
The price paid for a financial planning (FP) business seems to be on everyone’s mind; whether you’re a vendor planning to sell, a prospective buyer or a licensee. Naturally, everyone agrees that financial planning businesses reached their pinnacle just before the GFC in 2007/2008; and that since then the prices have been trending down. However, […]
The real cost of complying with the new Future of Financial Advice (FOFA) rules may be much higher for financial planning practices than the Government had thought; and as a consequence, some of the fundamental reasons for introducing FOFA may not be achieved. Banning commissions is obviously the most radical change, but unfortunately it has […]
Dear John, Below is an indication of FP recurring revenue multiples since the 2nd FOFA announcement on 28 April 2011, which is also based on actual prices paid for financial planning practices or client registers since May 2011. City CBD Regional and Country Recurring Revenue Recurring Revenue Multiple Multiple Investment clients […]
Over the past 2 weeks, as a consequence of the recent FOFA announcements, a number of Radar Results clients have said they will not now pay the same level of recurring revenue, or EBIT multiple, that they were prepared to pay before the FOFA announcements. Depending on the style of the planning business, the products […]
Radar Results has seen a decrease in requests for valuations on financial planning practices; however, it’s interesting to note an increase in valuations for divorce and property settlements. Before the GFC, most valuations were for finance applications, or for the lender to check on the equity-to-loan ratio. These days, very few are for this reason. […]
Fiduciary duty ‘beefed up’ Fines for financial advisers breaching their fiduciary duty could increase dramatically, moving the current maximum fine of $500 up to $200,000 when new legislation is introduced next month. The Government wishes to amend the Corporations Act to explicitly include a statutory fiduciary duty for financial advisers operating under an AFSL, requiring […]
