Business for sale. Based in Western Australia.

This Western Australian business has been operating for 25 years with offices located in a major regional city as well as Perth. The business:

• Holds its own AFSL.
• Is structured as a company, with no parent entity, subsidiary, or corporate authorised representatives.
• All three advisers and nine support staff are engaged as permanent employees (no “authorised representatives”).
• The business is a registered Tax Agent (BAS services / tax (financial) advice services), ASIC Agent, and acts as correspondence nominee for certain Centrelink clients.
• The business has a long history of continuous organic growth in clients, client revenue and profit.
• Has approximately $280 million of funds under advice.

Income, based on financial year ended 30 June 2024 (audited) is made up of (figures rounded):

FY24 profit before tax was approximately $800,000 (excluding interest revenue). Adding back the two principals’ remuneration would add a further $380,000 (approximate), taking it to a total of $1,180,000.

Key services can be summarised as follows.

• SMSF and related investment and financial planning advice, along with SMSF administration and reporting.
• Financial planning advice and bespoke portfolio management for direct and platform-based investment portfolios.
• Personal risk insurance.

Funds under advice, key platforms are as follows.

• Macquarie, with $38 million
• BT Panorama, with $25 million
• Netwealth, with $15 million
• SMSF direct (off-platform), with $135 million
• Direct (off-platform), with $78 million

The business has a total of 437 clients, of which approximately 2/3 are serviced from the regional city office and the remaining clients are in Perth. The average revenue per client exceeds $5,000 per annum.

The clients’ age brackets are as below.

• Under 40             2%
• Age 40 to 54       10%
• Age 55 to 59       10%
• Age 60 to 66       22%
• Age 67 to 79       37%
• Age 80 or over   19%

The main insurance product providers, based on FY24 revenue, are:

• AIA                              11%
• Onepath                     4%
• Zurich                         27%
• Asteron                      10%
• TAL                             18%
• Resolution Life         12%
• MLC                            18%

Business record keeping and data management systems are:

• Hard copy master files for key client information
• Xplan for CRM, file notes, registers, portfolio reporting, and advice tools.
• Microsoft 365 / SharePoint, for business systems and processes.
• Class, for SMSF administration
• MYOB, for business accounts.

Potential

The business enjoys a steady flow of new client referrals, from informal referral channels and a high proportion from existing clients. The following opportunities exist to grow the business.

• Preeminent position in regional city will continue to result in ongoing stream of new prospects. For context, over the past 12-months the business has received over 80 new unsolicited prospect enquiries.
• Cross generational referrals, through more active positioning. This may include expanded services to clients, or their family group, such as provision of Aged Care advice.
• Marketing strategies to grow the client base more generally. To date, the firm has been relatively passive in seeking new prospects as a steady flow of prospects is already generated from existing clients.
• More active engagement with, and support for, accountants that currently refer to the business (approximately 10 accountants).
• Purchase (or build by other means) SMSF administration books to then leverage into broader financial advice needs and strengthen the client relationship, improve control over service standards, and strengthen client ties to the business.

Potential exists for earnings growth through a range of other initiatives, some of which are currently being explored.

• Platform consolidation, to drive operational efficiency.
• Software stack review and rationalisation, to drive operational efficiency but also to reduce direct costs.

Pricing expectations are for 3.15 times recurring revenue, plus net tangible asset backing if the entity is purchased rather than the client base. A minimum of 80% of the purchase price would be required upfront.

Preference will be given to acquirers with approved funding in place 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 a ready-made business generating substantial amounts of income from a very loyal client base with excellent new business flow and high levels of profitability.

The vendors are willing to talk attractive terms for the purchase with an upfront investment, reasonable handover protocols and standard run off provisions for the right cultural fit.

For more information and a prompt introduction please call Jim Prigg on 0408 520 453 or jim@knowledgemaster.com.au.