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Corporate super advice firms drop in value

With their future uncertain due to regulatory issues, corporate superannuation advice practices may now be the least valuable in the industry in terms of M&A activity.

Having conducted a number of recent seminars with industry business brokers Forte Asset Solutions, Elixir Consulting managing director Sue Viskovic told ifa FOFA has had a significant impact on value of financial advice firms.

“In terms of valuations we are seeing a much more qualitative aspect of what people are paying for businesses,” Ms Viskovic said.

“The least valuable practices are now corporate super funds, as there are so many questions about the validity of their revenues – so those multiples have dropped considerably.

“At the higher end, risk recurring is attracting a premium, and sitting around the middle is your typical advice business.”

The comments follow the Corporate Super Specialists Alliance’s appeal to the new ministers responsible for financial services to help ensure the sector’s survival.

“Fund members need access to general advice and information to help them improve their life insurance decisions and retirement savings outcomes,” said CSSA president Douglas Latto in a statement last week.

“Corporate super specialists have a long history of providing these very important services and we need to make sure we can continue to deliver them."

Under FOFA, a conflict arises for advisers specialising in corporate super where a practitioner undertakes a super fund selection tender and provides ongoing services paid for by the super fund. The traditional remuneration model of corporate super advisers is considered conflicted under the new regime.