Radar Results has received a number of requests from financial planners looking to buy High Net Wealth (HNW) clients. To clarify, a HNW financial planning client can be described as one with investments under management of at least $1 million. Some advisers would say that an investment portfolio of this size is not particularly high nowadays. But, if both the husband and wife each own at least $1 million, then the family has $2 million in funds under management (FUM).
Depending on age, prices paid recently for these types of HNW clients can range from three to four times the annual fees. To receive a price multiple in this range, the preferred ages would be between 40 and 60 years. The Sydney CBD and north-west regions of Sydney seem to show the highest demand for this client style.
NON-OPT-IN WORTH MORE
When you buy a financial planning register or business which has clients that were established as a new client before 1 July 2013, they will not require an opt-in letter and are preserved as being non-opt-in clients. The pre-July 2013 clients will not require any opt-in letters to be sent, even if the adviser and licensee are completely new as a result of the sale. Demand for these non-opt-in clients has actually increased, and prices reflect this higher demand.
Interestingly, if a client moves from one adviser to another without being part of a sale transaction, then the grandfathering of the opt-in disappears. A letter must then be sent out every two years requesting confirmation from the client that they wish to continue with that adviser, and consequently receive the same services for the disclosed fees. If the letter is not returned, fees and commissions must be turned off. A reduced level of service offered to the client or an increase in fees, will also result in the preservation of non-opt-in being removed.