An adviser who was in the industry for 12 years has unfortunately deceased. We are the licensee and are facilitating the sale of his client base on behalf of his family.
The business was mainly servicing Risk insurance clients based on the Gold Coast.
Income is made up of:
Investment review fees $35,000 (excl. GST)
Insurance renewal commissions $72,000 (excl. GST)
Total annual Income is $107,000 (excl. GST)
The investment review fees are on a fee from FUM at 0.55% (incl GST).
These amounts are paid monthly by the product providers.
There are approximately 100 clients in the business with 20 being investment clients and the other 80 being risk clients. Approximately 85% of the clients are based on the Gold Coast area with the remaining 15% being based in Brisbane & the Sunshine Coast.
The make-up of the client base is Professionals and Skilled Tradespersons with a small number of Retirees.
The clients’ age brackets are:
| Under 40 | 10% | 40 – 50 | 75% |
| 50 – 65 | 43% | over 65 | 5% |
The main insurance product providers are:
AIA (incl. ex-CommInsure), Clearview, MetLife, MLC, TAL, Zurich.
Client files are stored in Xplan.
The FUM is approximately $7m spread equally in MLC and Macquarie Wrap.
Potential
The adviser was charging below market investment review fees so the potential opportunity/challenge is to increase those fees up to the market level.
Proposition
We require a 3.0 multiple of insurance revenue and 1.0 multiple for investment revenue.
We require 80% paid upfront with the remaining 20% paid after 12 months based on client retention.
We (the licensee) will assist with transfer of the client servicing rights, renewal of the first year fees and access to Xplan data.
Preference will be given to acquirers with approved funding in place and are capable of finalising the purchase quickly rather than a contract that is “subject to finance”.
All negotiations are subject to a signed NDA with the vendor prior to the release of any data.
This is an ideal opportunity for someone looking to acquire additional clients that they can bolt on to their existing business to increase profitability with minimal additional work.
The vendors are willing to talk attractive terms for the purchase with an upfront investment, reasonable handover protocols and standard run off provisions for a fast settlement.
For more information and a prompt introduction please call Jim Prigg on 0408 520 453 or jim@knowledgemaster.com.au.