There is a wide gap between what buyers are prepared to pay for high-quality financial planning practices in Australia and those that are considered “conventional,” reports Radar Results, an M&A expert that specializes in the financial services sector. Over the past 10 years, financial planners have been able to sell their practices for a recurring revenue (RR) multiple of between 3.0x and 3.2x. If the practice was considered less than high quality, they would still receive a price multiple of between 2.5x and 2.7x the RR, according to John Birt of Radar Results. These practices are now selling for between 1.5x and 2x the RR, and the grandfathered clients are selling for between 0.5x and 1x. Therefore, the difference today between the valuation of a high-quality financial planning practice compared to a conventional one is possibly up to 1.5x the RR, he says in an interview. Regulatory changes, such as new mandatory education requirements, have contributed to the valuation gap.