Increased local, international demand drives practice valuations

The price multiples for financial planning practices have risen as much as 30% in the past 12 months, analysis shows.

According to the annual Radar Results Price Guide, there has been a notable increase in price multiples for practices, rising between 10% and 30%.

The guide said there were several themes reflected in the data, including valuations for client registers filled with older clients - 80 years and over - skyrocketing. They are now achieving 1.5x recurring revenue, which is a 36% increase year on year.

Meantime, books dominated by clients aged between 65 and 79 increased to 2.2x-2.75x. Previously, they'd command between 1.9x and 2.5x.

A book of investment and super clients aged under 64 recorded the lowest increase in valuation, growing from 2.3x-3.0x to 2.5x-3.2x in the 12 months to June 2025.

In risk insurance, clients under 55 are valued at 2.5x to 3.2x, and 2.1x-2.8x for those aged between 55 and 60. However, books of risk clients aged over 60 have gone down in value, falling from a possible high of 1.8x to 1.5x.

"Multiples paid for risk books or insurance-revenue-based practices will depend on the client's occupation, age, premium size, policy type, and geographic location of the clients," Radar Results chief executive John Birt said.

Birt also added that strong demand both domestically and globally is fueling the rise in premiums, especially for larger practices with annual revenues of up to $5 million.

"However, Radar Results continues to see consistent transactions in the $1 million to $2 million revenue range, with approximately 50 sales completed annually," he added.

"One standout area was self-managed superannuation fund administration fees, which rose 14% over the past year, reflecting strong demand in this segment."

On a fee per client basis, it's those paying more than $5000 per annum that are worth the most, valued at between 2.7x and 3.5x. This is followed by risk insurance clients paying fees of more than $4000 per year, which are valued at between 2.6x and 3.3x.

As for an outlook, Birt said: "Market demand continues to outstrip supply. With a shortage of quality financial planning, accounting and mortgage broking business for sale, it remains a great market for sellers to activate their succession plans."