Radar Results director John Birt said the recurring revenue-based price paid for a financial planning register can vary depending upon the payment terms offered by the vendor, location of the clients, age of the clients and type of product or platform in which the client has invested.
A Radar Results snapshot of practice valuations as of September 2015 showed that investment books comprised of clients aged up to 64 have held up between 2.5 and 3 times recurring revenue.
Investment clients aged 75 or older are sitting at 1.0 to 1.5 times recurring revenue, while risk clients under 50 are at 3 to 3.7 times, according to Radar Results.
Meanwhile, prices paid for accounting businesses and trail revenue connected with loan books have risen due to demand.
“Multiples paid for smaller accounting businesses ($500,000 to $1 million in fees) have risen as a result of demand being higher than it was at the time of the last survey,” Mr Birt said.
“The highest demand for this price range comes from financial planning practices, or accountants heavily into financial planning and who wish to bolster the opportunity to cross-sell financial services to newly-acquired tax clients.”
