Welcome to CONNECT

Connect Financial Service Brokers is one of Australia’s leading business broker who specialises in the sales, acquisitions and mergers of financial planning, accounting and risk insurance businesses. Connect provides advisory services for the financial services industry in the following areas:

  • Succession planning
  • Business growth strategies
  • Specific projects
  • Business valuations
  • Recruitment services
  • Expert witness

We work closely with our clients on their journey and understand that every journey is unique therefore personalising our service offering to you. Working in cooperation provides services to business owners, dealer groups, institutions (banks/insurance companies), fund managers and consultants.

 

Industry Update
A quick snap shot by Paul Tynan, CEO of Connect Financial Service Brokers:

Commissioner Kenneth Hayne’s final report into Australia’s banking royal commission made 76 recommendations, all of which the Federal Government and Labor say they will support and implement. The main recommendations that will affect financial services be:
 
Recommendation 1.3 – Mortgage broker remuneration 
  • From the 1 July 2020, the Government will prohibit for new loans the payment of trail commissions from lenders to mortgage brokers and aggregators.
Recommendation 2.1 – Annual renewal and payment 
  • Ongoing fee arrangements must be renewed annually by the client.

Recommendation 2.2 – Disclosure of lack of independence 

  • Unless they are allowed to use those terms identified in section 923(5), financial advisers must explain why they are not independent, impartial and unbiased to a retail client.
Recommendation 2.3 – Review of measures to improve the quality of advice 
  • The Government has agreed to a review in three years’ time on the effectiveness of measures to improve the quality of advice.
Recommendation 2.4 – Grandfathered commissions 
  • Grandfathering provisions for conflicted remuneration should be repealed effective from the 1 January 2021.
Recommendation 2.5 – Life risk insurance commissions 
  • ASIC will conduct a review in 2021 to consider whether the reforms have better aligned the interests of advisers and consumers.
Recommendation 2.6 – General insurance and consumer credit insurance commissions 
  • The Government has agreed to review the remaining exemptions to the ban on conflicted remuneration in the course of its review in three years’ time on the effectiveness of measures to improve the quality of advice.
Recommendation 2.7 – Reference checking and information sharing 
  • The Government has agreed to mandate the reference checking and information-sharing protocol for financial advisers for all Australian Financial Services Licence (AFSL) holders.
Recommendation 2.10 – A new disciplinary system 
  • The Government has agreed to introduce a new disciplinary system for financial advisers. This disciplinary system for financial advisers will operate concurrently with the existing AFSL regime and ASIC will retain the powers it has under the current regulatory framework.

 

 The steps needed for a successful outcome are simple – seek professional guidance, do your research and be patient making sure the cultural fit is the key ingredient.

Opportunities

 

CONNECT are:

“Business Connectors”
“People Connectors”
“Idea Connectors”

 

CURRENT MARKETPLACE MULTIPLES

*Please note there are a number of factors that can reduce a business’s value; some of these factors include:

  • key person risk
  • age of clients
  • regional location
  • poor compliance
  • minority interest
  • accumulation / income phase

Current Recurring Revenue Multiples

Generally the majority of Accounting and Financial Service businesses that have revenue less than $1,000,000 are valued on a recurring revenue basis. An indication of the recurring revenue multiples based on recently completed sales are as follows:

Revenue Type Multiple
Accounting 0.7 – 1.1
Adviser Service Fee 1.5 – 2.8
Risk 2.0 – 2.8
Grandfathered Commissions 0 – 0.5
SMSF Advice 2.0 – 2.5
Mortgage 0 – 1.0
General Insurance 1.5 – 2.5

 

Current Earnings Before Interest Tax (EBIT) Multiples

Generally the majority of Accounting and Financial Service businesses that have revenue in excess of $1,000,000 are valued on an earnings before interest tax (EBIT) basis. An indication of the EBIT multiples based on recently completed sales are as follows:

Type of Business Multiple
Accounting 3.0 – 4.5
Financial Planning (fee for service) 4.5 – 6.0