Independents an attractive acquisition target

FOFA’s grandfathering provisions have made independent financial planning firms more attractive from the perspective of prospective purchasers, according to an industry business broker.

In a submission to Treasury calling for greater clarity on the situation regarding grandfathered commissions under FOFA, John Birt of Radar Results has expressed concern about financial planning practice values.

"It's now more attractive to have your own AFSL because you can move the clients and commissions to another licensee, as long as they have abided by the deadline of 30 June,” Mr Birt said, having sought legal advice on the grandfathering regulations.

“This probably makes boutique licensees more attractive as an acquisition proposition,” he added.

Mr Birt also said demand for financial planning client books and business is at an all-time high, with books with recurring revenue of $100,000 to $300,000 particularly sought-after, followed by those with self-managed super fund client bases.

FOFA’s grandfathering provisions have made independent financial planning firms more attractive from the perspective of prospective purchasers, according to an industry business broker.

In a submission to Treasury calling for greater clarity on the situation regarding grandfathered commissions under FOFA, John Birt of Radar Results has expressed concern about financial planning practice values.

"It's now more attractive to have your own AFSL because you can move the clients and commissions to another licensee, as long as they have abided by the deadline of 30 June,” Mr Birt said, having sought legal advice on the grandfathering regulations.

“This probably makes boutique licensees more attractive as an acquisition proposition,” he added.

Mr Birt also said demand for financial planning client books and business is at an all-time high, with books with recurring revenue of $100,000 to $300,000 particularly sought-after, followed by those with self-managed super fund client bases.

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