Practice sales increasing as confidence improves
Older planners who have been deferring their retirement plans are putting their businesses up for sale as markets improve, according to Forte Asset Solutions director Stephen Prendeville.
Planners who have been optimistically waiting for a return to a bull market before they sell have decided "it's about as good as it's going to get in the medium term", said Prendeville.
Confidence is being buoyed by the fact that the All Ordinaries is around 4700 and interest rates are low, he said.
Planners are also satisfied that the Future of Financial Advice regulations will not affect the profitability of their businesses, he added.
"In the last quarter of last year I had more new businesses come to market than I had for the preceding 12-month period. Many people are confident that their [recurring] revenue is likely to be what it is today - or even higher," Prendeville said.
While the number of sellers has been increasing, it is "completely dwarfed" by the number of people looking to buy books of financial planning clients, he said.
"I can't come anywhere close to satisfying buyer demand," Prendeville said.
A lack of organic growth (with the major investment class still being cash) means that many practices are looking to purchase books of clients.
"There's been a lot support from institutions to help their underlying practices to acquire. And finance is cheap," he said.
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