The financial services sector operates in a number of different areas, and buyers can choose from a number of sectors, such as accounting, SMSF’s, risk insurance, mortgage loans and general insurance.
Next month, Radar Results will produce its ‘6 Monthly Price Guide’ listing multiples that have been paid for these different types of businesses. But leaving multiples aside, which areas have the highest demand? Currently, it’s the high growth areas of Queensland, in particular the Sunshine Coast. Next is Adelaide and Perth, with financial planning and accounting in high demand as evidenced by the prices being paid.
Next is Sydney, specifically the northern suburbs and inner west looking for financial planning books; $150,000 of RR. South Sydney is a key demand area for mortgage books of any size with trails fetching up to two times, and the traditional risk insurance books still fetching 3.5 times if the clients are not too old.
Particular platforms are also in high demand, like Asgard, Navigator, Oasis, Summit and North. Some of Radar’s clients would pay four times recurring revenue if the age of the clients were to their liking and the location of the clients were geographically suitable.
Since 2011, there’s been 104 practices or books of clients sold through Radar, with a large proportion coming from NSW. While our head office is in NSW, you would expect a more even pattern state by state, particularly as we have had offices in all states since 2011.