The Value of Your Advice Business?

Will your advice business be worth more in 12 months than it is today?

  • No (42%)
  • Yes (36%)
  • Not sure (22%)

Our latest poll asks you to consider whether the new minimum professional education standards will have an impact (either way) on the value of your advice business.

In an article we released this week, we’ve learned that risk-focussed advice businesses have retained their value over the last year, despite the lead-up and now implementation of the Life Insurance Framework reforms. The same report, however, suggests that it’s still too early to determine the extent to which those reforms and the new minimum professional education standards will impact the future value of your business (see: Life Practices Hold Value…).

So, we thought we’d ask you to venture your own opinion, based on what you know today, about the future value of the advice business you own or in which you work.

The report from Centurion Market Makers, referred to in our article this week, suggests the valuation range, based on recurring revenue, for most risk-focussed advice businesses is currently very similar to that of full-service or holistic firms.

This possible exodus would in turn have an impact on the number of businesses that may be offered for sale…

One of the critical issues that Centurion maintains will impact future business valuations is the extent to which the LIF regime and the new professional standards may drive advisers either into earlier-than-planned retirement or into another industry. This possible exodus would in turn have an impact on the number of businesses that may be offered for sale, the valuations of which would then become subject to the free market forces reaction to supply and demand.

The projected value of your business in a year from now will most likely also be impacted by a range of other factors, some of which will relate just to you and your own circumstances and others that may impact both your own business and those of your peers. So, while we appreciate the real world can be a complited place, we’re asking – all other things being equal, whether you think the impact of the LIF reforms and particularly the new minimum professional standards, will have a positive, negative or neutral impact on the value of your practice.

Tell us what you think and we’ll report back to you next week…

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