Radar’s Six Monthly Price Guide

An indication of prices as at 31 March 2016 


Revenue Type Recurring Revenue multiple
Investment and super clients (age 80 yrs+)  1.0x to 1.5x
Investment and super clients (age 65-79 yrs) 2.0x to 2.5x
Investment and super clients (age up to 64 yrs) 2.5x to 3.0x
Risk clients (under 55 years) 3.3x to 3.5x
Risk clients (over 55 years) 2.5x to 2.8x
Corporate super clients 0.0x to 0.5x
Cs and Ds – mix of both risk and investment 2.0x to 2.5x
Mortgage clients 2.0x to 2.5x
Accounting fee – business clients 0.9x to 1.2x
Accounting fee – individual returns 0.5x to 0.9x

 The above multiples can vary depending on the terms offered by the vendor, geographic location of the client, age of the client and the investment products within the client’s portfolio. Multiples paid for risk books or insurance revenue-based practices will vary depending on the client’s occupation, size of premium, type of policy (stepped or level) and geographic location of the client. The multiples displayed above are for high-quality risk clients. The table above is based on market activity over the past six months to 31 March 2016


The main change Radar Results has seen in the buying and selling market for financial planning practices has been the increase in demand for older investment and insurance-based clients, for example, where buyers had heavily discounted the multiple of recurring revenue for investment clients over the age of 75, there has been a trend to buy now at these attractive rates. Further, as the life expectancy of an 80-year-old female is now 10 years and eight years for a male, there is real value in these ‘older’ clients. Therefore, Radar Results’ Six-Monthly Price Guide has moved the age category from 75 years to 80 years and above.

Similarly, with risk insurance clients, the age bracket has been moved to over and under 55 years of age, replacing the previous 50-year-old age bracket. Once again, buyers are no longer concerned if risk clients purchased are over the age of 50, or 55 for that matter, as the likelihood of the policies remaining in force to the age of 65 is now higher due to people retiring at a later stage in life and having children later. The higher mortgage levels on the principal residence also need protection for longer.


The multiple paid for larger financial planning businesses has a price range of four to six times the normalised EBIT, up from 5.5x as the maximum rate. Radar Results has seen larger, better quality practices come to market, commanding EBIT multiples not seen since prior to the Global Financial Crisis (GFC).

The price range for mortgage management businesses is 3.5 to 4.0 times the normalised EBIT, and 3.5 to 4.5 times the normalised EBIT for large accounting practices.



When selling your business, many more questions are now being asked by potential buyers, such as:

–      Do all your clients need a Fee Disclosure Statement (FDS) issued or just the fee-for-service clients?

–      Pre-July 2013, which of your clients are grandfathered under FoFA?

–      How many clients need an opt-in letter sent every two years?  

–      Since July 2013, how many clients are new?

–      How many are grandfathered clients, and have since had their investment and strategy substantially change, turning them now into opt-in clients?

–      Is the volume bonus going to move to my licensee?

–      Will the over-ride bonus previously paid by product providers to the vendor continue after the sale?

The additional red tape caused by FoFA reform has led to fee-for-service multiples for client registers, and planning books to either plateau or fall. Certainly, risk insurance books and businesses haven’t been affected by FoFA reform, and still command the highest multiples of recurring revenue within the financial service sector.

Accounting practices remain in high demand, particularly in the city and regional areas. Mortgage book prices are at an all-time high, and buyers are keen to pay cash for even the smallest books, for example, $2,000 per month trails. Unfortunately, the corporate superannuation section still suffers, with many planners not even prepared to make an offer. With commissions being turned off early next year, planners are now in search of institutions to replace these commissions with a flat fee per employee.