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 […]
Financial Planners and the Future of Financial Advice Reforms Consultancy firm, Radar Results, has done a survey of financial planners, to gain feedback on the Future of Financial Advice Reforms, which are expected to be implemented in July 2012. The survey required answers to questions about the adviser’s gender, age and whether they own the […]
Past sale prices of financial planning practices are really not a good indicator of how much you should pay for them in the future. The past is the past, and if someone paid 3x, 3.5x or even 4x, the recurring revenue (RR) for a business previously, what relevance would that have for today’s purchaser? Very […]
Consulting firm Radar Results (Radar) has provided valuations to the financial planning industry for many years. It became apparent volume bonuses were to be securitized by the government as being an incentive paid by the product provider to attract funds under management (FUM) and hence, may be banned. The latest Financial Services Reform paper released […]
