On this page
- 1. Make the revenue easy to verify
- 2. Fix the data before anyone asks for it
- 3. Be able to prove retention, not assert it
- 4. Re-engage the clients who have gone quiet
- 5. Reduce how much of the business is you
- 6. Understand your concentration
- 7. Plan the handover before you need one
- What does not move the number as much as advisers expect
- How long this takes
- Frequently asked questions
Every book type has a range. KiwiSaver books sit somewhere between 4.0× and 5.0× recurring revenue, life and health books between 3.5× and 4.5×, mortgage trail between 1.5× and 2.5×.
On a book producing $200,000 a year, the distance between the bottom and the top of one of those ranges is around $200,000. That is not decided by the market. It is decided by how much a buyer has to guess about your clients.
Almost everything below is about reducing the guessing.
1. Make the revenue easy to verify
This sounds like housekeeping. It is the single most common reason a good book prices at the bottom of its range.
A buyer needs to be able to reconcile the recurring revenue you are claiming back to the clients or policies producing it. If that reconciliation takes them three weeks and still does not quite balance, the difference gets treated as revenue that might not exist.
What good looks like:
- a client-level or policy-level schedule that adds up to your stated recurring revenue
- upfront, one-off and new-business revenue clearly separated from recurring
- twelve months of consistent figures rather than an annualised good month
- an explanation ready for any decline, ideally before you are asked
If your revenue has dropped and there is a reason — a provider changed terms, you deliberately shed clients, you were unwell for a quarter — say so first. A decline you volunteer is a fact. A decline the buyer finds is a risk, and risk is priced against the whole book.
2. Fix the data before anyone asks for it
The cheapest work on this list and usually the most visible. A buyer forms a view of how a book has been run within about ten minutes of opening the CRM export.
For most books, the fields that matter are the client's name and current contact details, their age, what they hold and with which provider, the recurring revenue attached to them, when they were last in contact with you, and a note that means something to somebody who has never met them.
The specifics differ by book type — mortgage books also need loan balances, fixed-rate expiries and remaining terms; KiwiSaver books need balances and contribution status; insurance books need premiums, sums insured and policy commencement dates.
The test is simple. Could another adviser pick up your client list and have a competent first conversation with any client on it? If not, the buyer is buying a commission stream rather than a client base, and they will price it that way.
3. Be able to prove retention, not assert it
Every adviser believes their retention is good. Buyers have heard it from every adviser.
What changes the price is evidence: how many clients you had three years ago, how many of them are still with you, what left and why. In an insurance book that is lapse history. In a KiwiSaver book it is transfer-outs. In a mortgage book it is what happened at refix and refinance.
This is the one item on the list you cannot create quickly, because it is a record of the past. If you are eighteen months out from a sale, start keeping the numbers now. If you are five years out, this is the single highest-return thing you can do.
4. Re-engage the clients who have gone quiet
Most books have a segment that has heard nothing in several years. They still produce revenue, so they still count in the valuation — but they are the clients most likely to leave when a letter arrives announcing a new adviser, and a buyer knows it.
A client who spoke to their adviser in the last twelve months transitions. A client who last heard from anyone in 2019 is a name on a commission statement.
You do not need to re-write the servicing model. A review conversation, a current email address, and a file note is enough to change how that client is counted. Working through a neglected segment over a year is unglamorous and it moves the number.
5. Reduce how much of the business is you
The uncomfortable one. If every relationship exists because of you personally, the buyer is not purchasing a client base — they are purchasing an introduction and hoping.
Things that genuinely reduce adviser dependence:
- clients who deal with a business name as well as a person
- documented processes, so servicing does not live in your head
- a second person, even part-time, whom clients recognise
- communications that come from the business rather than only from you
- file notes detailed enough for someone else to continue the conversation
You are not trying to make yourself irrelevant. You are trying to make the transition survivable without you, which is exactly what the buyer is pricing.
6. Understand your concentration
Two kinds, and buyers ask about both.
Client concentration is what proportion of your recurring revenue sits with your largest handful of relationships. If your top five clients are five per cent of revenue, losing one is an irritation. If they are thirty-five per cent, losing two changes the economics of the acquisition.
Provider or lender concentration is how much of the book sits with one insurer, one fund manager or one lender. This is not automatically bad — it can simplify administration and transition. But you should be able to explain why it is the way it is, and whether the arrangement transfers.
Concentration is often not something you can change in the time available. Being able to explain it is worth nearly as much as fixing it, because an unexplained concentration is treated as an unquantified risk.
7. Plan the handover before you need one
Transition support is the cheapest thing a seller can offer and one of the most valuable things a buyer can receive. It is also the item most often left until after the price has been agreed, which is exactly backwards — offer it during the negotiation, when it is still worth something.
A credible plan is short and specific:
- A joint letter to clients from both advisers, agreed in advance.
- Personal introductions for the relationships that matter most, in person where it is warranted.
- A defined availability period, with what you will actually do written down.
- A review schedule already in the diary, so clients meet the new adviser early and for a reason.
A buyer who can see that plan is buying a lower-risk asset than one who is told the seller will "help where needed".
What does not move the number as much as advisers expect
Worth saying plainly, because effort spent here is effort not spent above.
Writing more new business in the year before a sale. The buyer is purchasing the existing client base and its future economics. New business that required you to generate it is not what they are acquiring, and in some cases recently written policies carry clawback exposure that makes them a liability rather than an asset.
Growing revenue by adding low-value clients. A larger client count with a lower average value can make the book harder to service and no more valuable.
Tidying the office, the website or the brand. These matter for a business sale. For a client book sale they are close to irrelevant.
How long this takes
Data and revenue verification: weeks. Client re-engagement and transition planning: months. Retention evidence and reducing adviser dependence: years.
Which is the argument for getting an appraisal well before you intend to do anything. If you find out today that your book prices at the bottom of its range because nobody can evidence retention, you have time. Finding it out during due diligence means accepting the number.
Frequently asked questions
How far in advance should I start preparing?
Two to three years is comfortable and lets you build a retention record. Twelve months is enough for the data, the revenue reconciliation, the client re-engagement and the transition plan — which between them cover most of what moves the price.
Will improving these things guarantee a higher multiple?
No. They reduce the risk a buyer is pricing, which is what tends to move a book up its range. Market conditions and which buyers are active at the time also matter, and neither is within your control.
Is it worth increasing revenue before I sell?
Only if the growth is organic and can be explained. Buyers distinguish between a client base that grows on its own and revenue that exists because you keep generating it, and they are paying for the first one.
What if my book has problems I cannot fix in time?
Most books have something. The answer is almost always to disclose it early and be able to explain it, rather than hope it goes unnoticed. Buyers price known issues; they over-price unknown ones.
Can I get an appraisal now and sell later?
Yes, and that is how it is most useful. An appraisal is confidential, commits you to nothing and gives you a baseline to work against.
General information only, and not financial, legal, accounting or tax advice. Whether any of these steps is appropriate for your business depends on your own circumstances.
