Settled regulatory landscape boosts M&A confidence

The adviser M&A market has picked up over the past year with demand for practices way outstripping supply.

Steve Prendeville, founder and director of Forte Asset Solutions, says he currently has a minimum of 30 genuine buyers for every asset for sale in metropolitan areas.

“For regional areas, we would have five to 20 depending on the population of the catchment area,” he tells Professional Planner.

Prendeville says a reason for the uptick is that both buyers and sellers currently see little or no legislative risk in the market.

“The market has been artificially suppressed over the past five years due to the [Hayne] royal commission, passing down of the Hayne report, new legislation, removal of grandfathered revenue, Covid-19 and the need to charge fee and service propositions,” Prendeville says.

“Many owners have had to delay their exit timelines to steer their businesses through these times of change.”

Darren Smith, a business coach at Slipstream, agrees that some business owners who delayed retirement may now feel more confident to make the move.

“We’ve never had more inquiries from business owners starting to plan for retirement rather than just talk about it,” Smith says.

Similarly, Steven Fine, managing director of Growth Focus, says a recent analysis by his firm confirms that retirement is the number one motivator for sales, followed by leaving the industry, but this wasn’t the case five years ago.

“Succession, including a slow phase-out, would have been the second most common reason for a sale then, but now it places third,” Fine says.