The short answer
There is no single multiple that reliably prices an Australian financial planning book, and any figure quoted without qualification should be treated as a starting conversation, not a valuation. The rule of thumb that still circulates in the industry — a multiple of ongoing recurring revenue, historically spoken of as "two to three times" — was built in a different regulatory environment, when a meaningful share of that revenue was grandfathered trail commission that did not require the client to actively re-confirm anything. That commission structure was phased out; ongoing fee arrangements now require the client's written consent to enter into or renew the arrangement, obtained at least annually. The effect on price has been material and is well documented in industry commentary: buyers no longer pay for revenue on the book, they pay for revenue they believe will survive the next renewal cycle. Reported ranges for higher-quality, well-engaged advice businesses now cluster well below the old two-to-three-times heuristic, with lower-quality or less-engaged books trading at a fraction of that again. Where a specific book actually lands within any published range depends on the durability evidence — consent history, client engagement, licensee terms and client demographics — not on the headline multiple a broker quotes.
Why the multiple reset: what actually changed
Two regulatory changes reset how Australian financial planning books are valued: the phase-out of grandfathered commissions and the introduction of annual written consent for ongoing fee arrangements. First, grandfathered commission arrangements — trail commissions on products held since before mid-2013 that continued to be paid without requiring ongoing client engagement — were phased out, removing a layer of recurring revenue that had never needed to be actively renewed and, in some books, represented a meaningful share of total trail income. Second, the ongoing fee arrangement regime under Division 3 of Part 7.7A of the Corporations Act now requires a fee recipient to obtain the client's written, signed and dated consent both to enter into and to renew an ongoing fee arrangement, with renewal required at least annually, and written consent required before ongoing fees are deducted from a client account. Amendments effective from January 2025 tightened the mechanics further. The combined effect is that recurring revenue is no longer a passive annuity sitting on a book — it is a revenue stream that must be actively re-confirmed with every client, every year, or it stops. A valuation that treats booked recurring revenue as automatically maintainable is pricing an asset that no longer exists in that form.
Current recurring revenue multiple ranges post-reform
Industry commentary on the post-reform market for Australian financial planning books points to a wide spread rather than a single figure: well-engaged, higher-quality books with strong consent compliance and low attrition have been reported trading toward the upper end of a sub-two-times range of ongoing recurring revenue, while books with weaker engagement, thinner documentation or a higher proportion of legacy or disengaged clients have traded at well under one times recurring revenue. Multiples are commonly still expressed as a factor of ongoing recurring revenue, because for advice books the revenue is genuinely the asset — tangible assets are negligible and normalised earnings can be difficult to isolate cleanly from an advice practice's broader cost base. Treat any number in that range as a market observation, not a valuation methodology. A defensible valuation does not start from a market multiple and apply it uniformly — it tests the multiple against the specific book's evidence (consent compliance, attrition history, client concentration, licensee terms) and, where the evidence supports it, cross-checks against an earnings-based approach using capitalised maintainable earnings once a market-rate cost to service the book is deducted. Where the two methods diverge, the divergence is the finding, not a number to average away.
Ongoing fee arrangements: consent, renewal and what it does to revenue durability
The single biggest driver of value in a post-reform book is not the size of recurring revenue but its durability under the consent regime. A client who has consistently signed annual renewals, actively engages with review meetings, and has a documented fee-for-service history represents revenue that a buyer can reasonably expect to keep collecting. A client who has lapsed on a renewal, who has been difficult to re-engage, or whose consent history is undocumented represents revenue at genuine risk of falling away at the next anniversary — regardless of what the current management accounts show as booked income. Valuation evidence that matters here includes: the consent renewal rate over the last one to two cycles, the proportion of clients on active fee-for-service arrangements versus historical or transitional pricing, documented evidence of consent forms actually held (not merely billed), and any pattern of fee reductions or write-offs following renewal conversations. A book where renewal compliance is strong and evidenced supports a materially different multiple to an otherwise similar book where it is not — even if the two books show identical trailing twelve-month revenue.
Licensee dependence and transfer approval on sale
A financial planning book does not transfer the way a trading business's client list does. The adviser operates under an Australian Financial Services Licence held by a licensee, and in most structures the client relationship, the servicing arrangement and often the ongoing fee consents sit within systems and agreements controlled by that licensee. Selling a book commonly requires the licensee's consent to the transfer, and licensee agreements frequently constrain who the book can be sold to — sometimes to other advisers within the same licensee network, sometimes with a right of first refusal, and in some networks under a formal buyer-of-last-resort arrangement where the licensee itself (or a related entity) has a standing right or obligation to acquire the book on pre-agreed terms if no external buyer is found. These terms are contractual and vary materially between licensees; they are not a matter of public benchmark and need to be sourced from the specific licensee agreement rather than assumed. A valuation prepared without reference to the actual transfer mechanics available to a specific book risks concluding a value the vendor is not actually free to realise on the open market.
Buyer-of-last-resort arrangements versus open-market sales
Two quite different value questions can attach to the same book depending on how it is actually sold. An open-market sale — where the adviser or their estate can market the book to any willing buyer, subject only to licensee consent to the transfer — is more likely to realise a value closer to the top of what the evidence supports, because competitive tension and buyer-specific synergies (an existing adviser absorbing the book into spare capacity, geographic overlap, complementary client mix) can be captured in the price. A buyer-of-last-resort arrangement, common with some licensees historically, gives the outgoing adviser (or their estate, in the event of death or incapacity) a guaranteed exit at a pre-agreed formula — typically a set multiple of recurring revenue — but the certainty comes at a cost: the formula is fixed in advance, does not respond to the book's actual quality or an open-market bidding process, and can sit below what a well-evidenced, well-engaged book might otherwise achieve. Which pathway is actually available, and on what terms, is a threshold fact a valuation needs to establish before selecting a methodology — it changes both the appropriate multiple and how much weight comparable open-market transaction evidence should carry in the conclusion.
Client demographics as a value driver
The age profile and funds-under-management spread of the client base does more to move a book within its supportable range than most vendors expect. A book weighted toward pre-retirement and early-retirement clients with meaningful and growing FUM typically supports a stronger multiple than one weighted toward an older, drawing-down client base, because the revenue horizon is longer and the FUM (and the fee calculated on it) is more likely to grow than shrink over the buyer's expected holding period. A book concentrated in a small number of large relationships carries concentration risk — the loss or transfer-out of two or three large clients can materially change realised revenue, and a buyer will price that risk in. Conversely, a broad base of moderate-FUM clients with consistent engagement spreads the risk, even where average revenue per client is lower. Evidence a valuation should test includes: age distribution of the client base, FUM distribution (median and concentration in the top decile of clients), average client tenure, and any pattern of FUM outflow (pension drawdowns, aged-care transitions, intergenerational wealth transfer out of the practice) that would reduce the fee base over a realistic holding period.
What moves a book within the range
Seven factors determine where a specific financial planning book lands within its supportable multiple range: consent and renewal compliance, client concentration, client age and FUM trajectory, licensee transfer terms, fee structure, adviser dependence, and compliance history. A valuation file needs documented evidence for each of the following:
- ·Consent and renewal compliance — documented annual renewals versus lapsed or undocumented consents
- ·Client concentration — revenue spread across the base versus dependence on a small number of large relationships
- ·Client age profile and FUM trajectory — growth-stage clients versus a drawing-down, ageing base
- ·Licensee terms — whether transfer requires licensee consent, and whether a buyer-of-last-resort formula applies
- ·Fee structure — genuine fee-for-service arrangements versus legacy or transitional pricing still being unwound
- ·Adviser dependence — how much of the relationship is with the practice versus a specific named adviser
- ·Compliance history — audit findings, complaints history and any outstanding remediation exposure attached to the book
What a financial planning book valuation costs and how long it takes
The Essential report (from $1,495 + GST, 10–14 business days) suits a straightforward single-methodology matter such as a small book transfer. The Comprehensive report (from $3,995 + GST, 15–25 business days) is typically the right tier for a book sale, succession transfer or partner buy-in that needs dual-methodology cross-checking, consent-durability analysis and licensee-terms review. The Defensible Valuation File (from $8,995 + GST, 25–35 business days) is the level for small business CGT concession claims, contested transfers or any matter likely to be reviewed by the ATO or tested in litigation. Rush turnaround is available at +30% of the base fee, subject to capacity. Fees are fixed at engagement and never contingent on the outcome.
When the number carries a tax position
Financial planning book sales and internal transfers regularly raise CGT questions — an adviser retiring and selling to a successor, a book transferred between related entities as part of a succession plan, or a small business CGT concession claim on the disposal. For these matters the relevant standard of value is market value as defined in IVS 104 and consistent with the willing-but-not-anxious principle from Spencer v Commonwealth (1907), which is the basis the ATO's 'Market valuation for tax purposes' guidance works from. A report prepared to that standard also follows APES 225 Valuation Services, the professional standard governing how CA ANZ, CPA Australia and IPA members conduct and disclose valuation engagements. Where small business CGT concessions under Division 152 of the ITAA 1997 are in view, the gateway test that applies depends on which concession is being claimed and the concession's own effective date: the 15-year exemption, the $500,000 retirement exemption and the small business rollover are still gated by the aggregated turnover test (under $2m) or the maximum net asset value test — the net value of CGT assets of the taxpayer, connected entities and affiliates must be $6m or less just before the CGT event — while recent reform has separately lifted the turnover gateway for the 50% active asset reduction to $10m aggregated turnover as an alternative to the $6m net asset test. Given legislative settings in this area have moved recently and the applicable date and threshold depend on which concession is being claimed, confirm the current gateway test for the specific concession against the ATO's guidance at the time of the engagement rather than relying on a single figure. The active asset test under s 152-40 turns on whether the book is genuinely used in carrying on the business. Where a transfer is not at arm's length, market value substitution under s 116-30 can apply, and the documented evidence behind the stated value — not a broker's rule-of-thumb multiple — is what the position rests on if reviewed. Prismi is not a registered tax agent and does not provide tax, legal or financial advice; concession eligibility, licensee transfer approval and deal structure are matters for the adviser's accountant and lawyer, working from the valuation evidence. What a valuation contributes is a methodology-tested, evidence-documented position — prepared with the ATO's market valuation expectations in mind so it is defensible if reviewed, not represented as pre-approved by anyone.
The supportable answer
A financial planning book is worth a supportable range, not a multiple recalled from before the consent regime existed. The honest starting questions are: how much of the recurring revenue has actually been re-confirmed under the current consent and renewal rules, how concentrated is that revenue in a small number of relationships, what does the client age and FUM profile suggest about the revenue horizon, and what transfer mechanics — open market or buyer-of-last-resort — are actually available under the licensee agreement. Our reports conclude at the most supportable position within that range, with the recurring revenue durability analysis, licensee transfer terms and client demographic evidence documented — senior-reviewer signed under an independence statement, working file retained ten years, fees fixed at engagement and never contingent on the outcome. Where a party wants a number that suits the negotiation rather than the position the evidence defends, we will say so and decline the engagement on those terms.