Practice sales climb across sectors after grandfathering relief
The relaxation of the pinch-point around the transition of financial services businesses to new owners has resulted in renewed purchasing activity across planning, accountancy and corporate superannuation businesses.
Radar Results principal John Birt said the clarification around grandfathering has seen renewed interest in the sale and purchase of financial services businesses, with his business receiving nine new practice listings in the last month.
As a result of the clarification Birt said demand for mortgage books had climbed, with buyers paying 1.5 to 1.8 times the trail with few questions asked.
Similar demand was taking place for accounting practices, and those in Melbourne and Sydney generating $500,000 to $1 million in accounting fees were the most sought after.
According to Birt, corporate superannuation has also bounced back. He said prices were returning from historic lows, with purchasers prepared to pay 1.5 to 2 times multiples, but this was dependent on which fund manager was providing the administration service and the licensee of the buyer.
Birt noted that some licensees were paying planners who were qualified corporate superannuation fund specialists a flat annual fee to service each member’s plan. This had climbed higher than the previous commissions structure in use, which was driving up the price of these businesses.
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Jason Spits
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