Business valuations across the financial services sector have climbed sharply over the past 12 months, according to the latest Radar Results price guide. The business broking firm’s report shows price multiples for financial planning practices have increased by 10% to 30%.
It cites a notable shift in the market value of registers with older client bases. Registers comprised primarily of those aged 80 and over are now attracting valuations of 1.5 times recurring revenue – a 36% increase from the previous year’s multiple of 1.1x.
The firm believes the rise in valuation multiples is driven by sustained domestic and international demand – especially for larger businesses generating up to $5m in annual revenue.
It also noted consistent buyer activity continues in the mid-market, with about 50 business sales completed annually in the $1m to $2m revenue range.
Looking ahead, the firm states market demand continues to outstrip supply, and that with a shortage of quality financial planning, accounting, and mortgage broking business for sale, it’s a sellers market.
Accounting firms and mortgage broking client registers also recorded growth, with valuations rising between 5% and 10%.
