FP business sales considerations

The unspoken uncertainty hanging over the future of FP business valuations is how Industry Super Funds (ISF) and the banks will influence those in the “sale of advice profession” and the sale of their businesses, if and when they re-enter the market.

If these gigantic players re-enter the playing field, there are some critically important considerations to take into account that could affect business valuations.

Will they be allowed to give advice, recommend products and implement strategy on the same basis as mainstream, traditional, small business type advisors? Or will they be allowed back into the game under “special rules” or new rules or the relaxing/re-interpretations of existing ones?

Already we have seen a reticence by Minister Jones to commit or implement any of the recommendations of the Levy report. This has been postponed until after the budget. This is code for, “Let’s wait and see what we can do to make it easier for the industry funds to get some sort of advantageous carve out.” And secondly in the noisy aftermath of the budget to quietly begin to implement what the big funds want and quietly open the doors for the banks to re-enter.

Make no mistake, Minister Jones is working towards allowing more influence by the IFS’s for average Australians to be advised by them. This is being examined under the guise of consumer equity.

So, if more people can be advised by industry super fund advisors, then is there a continued need for the average superannuant to talk with an “independent advisor”?

Notice the inference by Minister Jones already that people go to their super fund for advice very often as a first call.

In short, the current government aided and abetted by the hostile previous government is tilting the influence away from small business advisors and advisory firms to the institutions and IFS’s.

Note the aggression of the government and the bureaucracy towards SMSF’s, end benefits taxation of super, the lowering of extra contributions levels to super and the tightening of who actually is eligible to receive super benefits.

In recent months we have noticed the firming of multiples for the sale of financial planning businesses. With increased interest rates, access to funds has made it harder to acquire capital for buyers.

With the very real possibility of a horror budget, the threat of further increases of interest rates for borrowers and a move by governments to open up the market for the sale of advice options, those looking to sell their businesses should take advantage of the better multiples that are available at present.

That old saying about the Golden Rule, “The man with the gold makes the rules” has never been truer. Banks, institutions and the IFS’s have the gold to influence outcomes far more than less than 20,000 small businesses.

Want to know more about how to position your business for sale (without commissions) please contact me today at jim@knowledgemaster.com.au or on 0408 520 453


“Our business had heard of Knowledgemaster from industry colleagues and other advisers. Dealing with Jim was an absolute breeze and I found him to be very attentive in his correspondence and outstanding in being able to connect us to so many prospects. One of the best investments we have made and we’ll be utilising the service again.”

Chris Zegers. Senior financial adviser and partner at Keystonewealth Sydney


“Hi Jim, Thanks so much for your help and advice throughout the sale process, you were invaluable to us both! We will be staying on for a while to ensure a smooth handover. I’m happy to continue to receive your Knowledgemaster emails as I find them very informative. Many thanks again.”

Mark Rothnie QLD