Financial stress following the global financial crisis (GFC) has led a spike in the number of financial advice businesses and client books bought or sold in the past three to six months.
"[There is] probably a spike increase in the level of supply. Particularly we've seen that in book sales selling off, say, their bottom $200,000 recurring revenue," Forte Asset Solutions director Steve Prendeville told InvestorDaily.
"Correspondingly though, we've also seen a spike of demand and it's mainly for the same reason - financial stress."
He said people were selling off the back parts of their books with a profit so they could reinvest back into their lifestyle.
"Also, the buyer normally has the same team they had in place pre-GFC and so they're starting to get full utilisation out of that team by bringing in the new book and attempting to bring that client normally from a retail base into a fee-for-service environment. There is also cross-selling opportunity," he said.
He said he expected the spike would increase at a significant rate coming into the new year and as the introduction of the Future of Financial Advice reforms drew closer.
"Most of it is [because of] financial stress and there is no real sign of that abating," he said.
