Business valuations across the financial services sector in Australia have climbed sharply over the past 12 months, according to the latest Radar Results price guide.
The Australian business broking firm’s latest 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 Australian 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 in Australia completed annually in the $1m to $2m revenue range.
Looking ahead, the firm states market demand continues to outstrip supply, across the ditch, 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%.