Recurring revenue multiples update

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 with                              2.5x to 2.7x                               2x to 2.2x

average age over 60 yrs  


Accumulator inv. clients                            2.7x to 3x                                      2.5x  


Risk clients                                                   3x to 3.5x                               2.7x to 3x

(average age under 50 yrs)   


SMSF clients any age                              2.7x to 3x                                  2.2x to 2.5x


Corporate super clients                               1x to 2x                                0.75x to 1.5x


Cs and Ds (Inv and risk)                                   2x                                            1.5x




 The multiples above can vary, depending on terms offered by the vendor, actual location of the clients, client ages and the particular investment products recommended. Other factors that influence the prices paid for a FP business are the number of advisers, number of clients, grade quality of the clients, systems and processes within the practice, fee for service arrangements (FOFA ready or not) and the client value proposition CVP that’s currently being provided.



Accounting practices in big demand


Not surprisingly, a number of financial planners are now looking to acquire accounting practices so they can cross-sell risk, investment, loan and SMSF services. Prices paid for accounting fees can vary from city to regional country areas, with $1 paid for each $1 of annual accounting fees being standard in the city and lower prices for country regions. The Cooper Review has had an impact on prices paid for non-business tax fees (Individual tax returns). If you would like your accounting business valued or appraised, then please contact John Birt 02 4384 5670.





New Adelaide Office

Introducing our New Associate – Andrew MacDonald  
Andrew entered the industry in 1984 following a career as a Land and Business Agent. He became a regional manager with Monitor Money and then in 1989 founded his own Securities Licence, Financial Management Services (FMS), as a joint venture with a CA practice. That year he was elected State Chairman and Board member of ASIFA.

In 1993 Andrew established Symetry, and 6 years later he negotiated a joint venture with Perpetual Trustees that included a large payment to Symetry’s stakeholders. In 2004 the business had $1.4 billion FUM and Andrew participated in the negotiations leading to a sale of the business to the CBA group. In the next year he sold FMS into the WHK group and established a new business in funds management involving Equity Trustees, which raised over $300 million in FUM. During this time he was also a Director of MMC Funds Management and was instrumental in assisting it to grow from $15 million FUM to $560 million. These businesses where sold in 2005. In total Andrew has been involved with 14 transactions, either acquiring or selling financial services businesses.


Andrew is the current Chairman of FinaMetrica, one of the world’s pioneers in financial risk profiling methodologies and systems.


If you wish to contact Andrew MacDonald, Phone 0419 791 020 or Email





RadarBC, a division of Radar Results, now has six of Australia’s best business coaches engaged to provide its unique business coaching program to financial planners. Using RadarBC‘s coaches will increase the value of a financial planning practice, leading to a higher sale price, a shorter succession timeframe for an existing partner, or just making the planning business more profitable. Increased profits can then flow into many areas, ensuring a happier business and a happier personal life for everyone. Clients of RadarBC vary from small boutique businesses, earning at least $500K in revenue, through to larger institutions.


RadarBC is unique, offering a blend of coaching, consulting, mentoring and implementation services to supplement a practice’s operational resources. You pay only for what you need, when you need it. Upfront there are strategy coaches working with the principals and executive team, and mentors who have been there and done it. The strategy plan and set of projects are prepared specifically for your culture, for your development and for your business’s vision; they are designed to increase the value of your business, usually within a time frame of 6 to 12 months. However, you choose the speed and depth of implementation.