Offers to buy financial planning practices have been pushed to eight-year highs, according to business broker Radar Results.
In a statement, Radar Results principal John Birt said prices being offered to buy advice firms and client registers are their highest in recent years due to low interest rates and “plentiful finance”.
There is also an internal need at dealer groups to retain existing clients, he said.
“Some medium-to-large licensees have offered to buy the practice themselves, as a temporary hold until they can find another adviser to join their group, and then on-sell it,” he said.
“The existing clients and associated revenue is retained.”
Demand for accounting practices, however, is not the same. Many have higher levels of business costs that cannot be passed down to clients, Mr Birt said.
“These days, taxation clients are more demanding, more selective with the services they require and more critical of the value for money concept,” he said.
Mr Birt added that accounting practices must do more than just lodge tax returns.
“Many are undercharging, which I feel is a confidence issue," he said. "Accountants that provide advice, administration and compliance work to their SMSF clients are either overcharging by an exorbitant amount or, in many situations, not charging enough.
“Prices paid for individual tax return clients have fallen. The main steadier for accounting practice prices is the demand by financial planners looking to reach a large number of prospects to sell loans, planning services, SMSF set-up and advice, along with risk insurance products,” Mr Birt said.
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