Big numbers of IFAs are selling their businesses because they want to get out of the industry before changes brought in by the retail distribution review, according to a business set up to market IFA firms.
For Sale Sold, which was set up in January by Shakespeare Putsman LLP partner Gareth Fatchett, says demand for the service has increased massively since the RDR discussion paper was released, with 112 IFAs asking the firm to sell their businesses.
Fatchett says the average age of IFAs looking to sell is 58 and they cite the RDR as one of the main reasons that they want to get out of the industry. He says he has so far taken on 21 firms to sell.
Fatchett says many of his buyers view the RDR as a positive move and see consolidation as the future.
The average size in turnover of the businesses up for sale is between £500,000 and £750,000, with selling prices between three to four times recurring revenue streams.
Fatchett says that a lot of interested buyers are from adviser firms in the top 50 as well as a number of life insurers and banks which are looking to increase their distribution.
He says: “Since the RDR, I have been blitzed by advisers wanting to sell their busin-esses, with over 100 enquiries from advisers since the beginning of July. People mention the changes in the market as the main reason for wanting to sell.”