Selling a financial planning business
Selling a financial planning business is a major step - it needs careful thought and consideration.
It's easy to get caught up in the day to day routine, so why not take a couple of minutes and find out what your business may be worth?
Radar provides consulting services to financial planners and accountants who wish to expand by acquisition. Information provided to Radar by a seller is kept confidential and is only provided to a Radar client once they have been matched. We do not advertise, display, circulate or in any way publish the details of a Seller.
No fees, no commissions
Importantly, since we are not brokers there are no fees paid to Radar by the seller. A financial planner or accountant who contacts Radar wanting to sell part or all of their business will not incur any costs, because Radar is paid a consulting fee by the purchaser.
It takes just 4 minutes to complete the free online Appraisal Questionnaire - then you'll know what your business may be worth.
To register your interest in receiving a valuation from a Registered Valuer please complete the Formal Valuation Questionnaire.
If you would like a confidential phone enquiry with a Radar Associate please click here.
Valuation Considerations
Evaluation of five primary indices forms the basis of the valuation process with various lesser factors influencing and impacting on the actual marketable value. A critical factor requiring careful consideration is whether the business will be able to sustain the current revenue levels after it is sold.
The primary valuation indices are:
- Geographical location - whether capital city, CBD, regional or country is a major consideration which can influence a valuation immeasurably.
- Client age - and critically, whether they are predominately accumulators or retirees.
- Trail revenue - surety of these revenue streams adds weight to the calculated metric.
- FUM - fund size, investment style and portfolio management structure are critical.
- EBIT - profitability is important.
Determining the actual marketable value of a business is not an exact science; many factors influence and affect the valuation to some degree. While up-front fees, trail revenues and FUM can guide the valuation process, other factors can play havoc with EBIT values.
Therefore a number of lesser factors must also be considered including:
- The number of clients and their average investment amount
- The SOA pricing and fees schedule
- The Dealer Group affiliation
- The fund manager selection and the platforms used
- The wholesale-to-retail investment mix
- The number of partners and support personnel
- Whether the financial planners will continue to work in the business after sale