How is your IFA client book valued? | 2026 UK seller guide
- Simon Bourke
- Jul 15
- 11 min read
Updated: 2 days ago
15th July 2026
“What is the value of my client book?” is one of the first questions financial advisers ask when they start thinking about selling. You may be weighing up whether to sell your book of business now, or keep working for a few more years before you come to market.
You may already have an offer from your network or directly from a buyer and want to understand how it compares to what is on offer in the wider market.
Either way, knowing what your business is worth gives you a clearer basis for deciding what to do next and creating your own financial plan.
Other questions tend to follow quickly. What would the process involve? How long would it take? What would you need to prepare? These are worth thinking about earlier than advisers realise.
At Chapters, we usually recommend that retiring IFAs start the process nine to twelve months before they want to be fully out of the business. If you are considering a sell-and-stay deal or partnership programme as your exit route, it is worth noting the runway can be longer, because retirement is phased over a 2+ year period.
This guide explains how acquirers value IFA client books, what can increase or decrease your multiple, and what the current market looks like for retiring advisers and financial planning business owners considering their options. It also covers deal structure, tax, earn-outs, payment timing and the main factors that affect how much you receive for your business.
If you are looking to get an accurate, bespoke account of what your business is worth today, contact a member of our team for a free, no-obligation conversation to discuss the multiple range you can expect when you come to market.
Table of contents
What does the IFA acquisition market look like in 2026?
Since Chapters Capital was founded in 2019, the IFA acquisition market has become significantly more active and competitive. Over the last couple of years, we have seen more buyers enter the space, which has helped push multiples higher for good-quality businesses.
Based on Chapters Capital’s analysis of more than 100 transactions, EBITDA multiples have risen from a typical base of around 6x in 2019/2020, with 7x then considered stretched, to 7x–8x now being a more common base range and multiples north of 10x available for the strongest businesses.
Recurring income multiples have followed a similar trend, increasing from around 3x to 4x, with 4x now essentially the norm. That is a 30% increase since 2019, and again, we have seen higher multiples offered for top-quality businesses.
This also means that qualifying the buyers you speak to is more important than ever. There are potentially hundreds of acquirers in the UK financial planning market today. You could spend a lot of time going through conversations with firms that just aren’t relevant for you or your clients and get attracted to parts of a transaction or offer that don’t materialise. The intermediary you appoint should be able to narrow that market properly, so you are comparing serious buyers rather than simply collecting offers.
At Chapters, for most transactions we recommend speaking to a maximum of 4 to 5 firms for the first wave of meetings. Our understanding of the market allows us to narrow the field down to that handful who genuinely align on client service and culture fit. There really needs to be a compelling reason to bring in any more buyers than this at this stage. If we don’t find the right fit in that selection, which almost never happens, we can always reassess and create a new list.
This approach gives you the benefit of competitive tension and a clear view of what could be a good fit, without wasting time on unnecessary buyer meetings. There will be no shortage of interest in a good business, so the main aim is to narrow the market down to the few buyers who will have the right financial planning philosophy, central investment proposition, platforms, and location to properly look after your clients.
How is an IFA book of business valued?
There are three main approaches to expressing the value of a financial advice business: as a multiple of recurring income, a multiple of EBITDA, or a percentage of AUM.
A few factors determine the approach a buyer will take to valuing your business. It will largely be driven by the type of buyer, the type of deal being agreed, and the scale of the transaction.
If a firm is PE-backed they tend to always lead with EBITDA once the firm gets above a certain size, due to profitability being key for their returns. The profit today and the potential for increased profit in the future is the real driver on what someone is prepared to pay for it.
For smaller IFAs and client book sales, the most common approach is a multiple of recurring income. This will be from larger nationals as well as local and regional firms. In our experience, many local and regional firms will offer multiples of recurring income even on significantly bigger deals, as those buyers are typically still owner-led and not PE / debt-backed.
As a guide, any deal with more than £400,000 of recurring income will likely be valued on an EBITDA basis. Below that, most firms will offer on a multiple of recurring income. You can see recurring multiples on deals larger than this, and EBITDA below this level, but as a rough guide, these are the common thresholds.
What a buyer intends to do with the book post-completion also influences the approach to valuation. For example, if they have a DFM offering as well as planning they will more commonly offer on a percentage of AUM.
What factors affect the value of my IFA client book?
The value of an IFA client book is not based on recurring income alone. Two firms with the same figure of recurring income can attract significantly different multiples depending on some of the factors outlined below.
Average AUM per client: Client books with a higher AUM per client are typically valued higher due to it being more profitable to deliver a service to fewer clients.
Revenue split: Recurring revenue is what determines value. One-off planning fees, transactional income and commission-based revenue will usually be excluded from the core multiple or treated separately unless you are selling on an EBITDA multiple and you intend to stay post sale. If you’re retiring, it will almost always only be recurring income that is considered.
Client age profile: An older client bank will not attract the same attention as one with clients in their 50s and 60s. However, evidence of intergenerational planning such as relationships with clients’ children and grandchildren can help protect value. If you can clearly demonstrate the links between generations this can bring the weighted average age of the overall client bank down.
Client concentration: Buyers look less favourably on client books where one household or a small group of clients makes up a large proportion of recurring income. The issue here is that if one or two big clients account for the main value of the book, the risk is significantly higher.
Client retention: Buyers will look at how long clients have been with the business and how likely they are to stay after completion. If clients see the relationship as being with one adviser rather than the firm, the transition will need to be handled particularly carefully to prevent clients leaving. This is where we find a targeted and tailored process to finding a buyer based on client fit is the key to success. If we get client-fit right the value tends to follow, and it is achieved over the earn out.
Growth trajectory: Recent inflows, new clients and potential for future growth will all be taken into account by a buyer when putting together an offer. If you can show clear work in progress, or clients that are on track to invest more with you over the next 12 – 24 months, then we can find ways to reflect that in the value of the book. It shouldn’t stop you selling and taking capital off the table today.
Operational expenses: When looking at EBITDA or recurring income, costs are important to consider. Even if a buyer offers a multiple of recurring income they will understand what the profit is today and the potential for improved profit post completion. Business with strong revenue but high costs will often look less attractive. Costs including support staff salaries, technology, office rent, marketing/ad spend, and legal or accounting fees may affect the consideration offered. That being said, we would warn sellers not to cut costs just before a sale solely for the sake of selling. Any credible buyer will see right through it and you will put your clients, the business, and deal in jeopardy. Run the business as usual but be sure to keep an eye on your resource model and know your numbers – number of advisers to support staff, number of clients per adviser, number of meeting per planner per week etc.
Self-employed advisers: There is nothing wrong with having self employed advisers if that is the strategy you’re deploying while you own the firm, but this needs to be considered when selling – does that align with the buyer’s strategy? In most cases it doesn’t. Self-employed advisers are lower margin than employed advisers and, when it comes to selling the firm, there is no clear legal ownership of the client relationships. You can’t sell what you don’t own.
Service model and proposition: Buyers will look for a clear, repeatable proposition rather than a book run differently from client to client. Written processes, client segmentation, clear documentation, review schedules and CRM records all make the business easier to transfer. Every client with bespoke advisory portfolios in weird and wonderful funds makes the business more difficult to sell and may also create unnecessary risk for your clients if something happens to you, as another adviser may struggle to take over responsibility for those portfolios.
Compliance history: A clean compliance record gives buyers more confidence in a transaction. Complaints, past remediation work or unresolved regulatory issues can make a buyer more cautious. It is crucial to keep good records and clear processes on documentation but if you are a sole adviser you don’t need to get a back office in order to sell. Just ensure the files are stored well and you can provide data efficiently. This will also demonstrate to buyers that you handle your client affairs professionally and reassures them that the client handovers will go smoothly.
Geography: Location can affect how many buyers are suitable for the business and therefore the multiples on offer. Where clients are used to face-to-face servicing, buyers will need either an existing local office or plans to expand into that area. If everyone is seen remotely, that will carry one type of cost. If everyone is seen four times a year in person and you travel to them, and that is what they expect, that will carry another, very different type of cost. These are extreme examples, but buyers will assess how they can manage clients going forward without disrupting the service they are used to.
Does a higher offer for my business mean more disruption for my clients?
It is quite common that the highest multiples in the market come with conditions that most people won't accept. However, getting a premium value does not necessarily mean more disruption for your clients. Finding both the right fit and the right deal are not mutually exclusive and we pride ourselves on achieving both for our sellers.
Client retention is central to client book sales, and buyers are incentivised to make sure clients are comfortable throughout the transition. However, this is much easier when the match between the buyer and seller is strong from the outset. Where buyer and seller don’t align, there will inevitably be more change for clients which will likely lead to clients leaving and affect your final consideration.
This is where Chapters Capital comes in. Before introducing you to any acquirer, we look closely at how compatible they are with your business and approach to financial planning. This includes considering alignment on investment propositions, platforms, fee structures, services, back-office systems, financial planning philosophies and locations. We also take into account how you want to exit, whether that means selling and retiring now, selling and staying on as an adviser for a few years, or exploring a partnership model. The aim is to introduce you to buyers who can offer competitive terms without losing sight of what matters to you, your clients and your team.
The context of the offer is also important. Once the buyer pool has been narrowed to firms that are a strong fit for your business, a higher offer may simply reflect the competitive tension created by a properly run sale process. It may also be materially higher than a direct offer from a buyer or an offer made within a network, where multiples tend to sit below market rates. We often hear of firms that sold through a direct approach for as much as 50% less than we could have achieved for them. Sometimes taking the lower offer is the right thing to do, but if you haven’t explored the market then there is no reason to take a low offer without assessing what else is out there. It is only when a multiple sits well above the wider market that we would be cautious about excessive changes to client fees, platforms and investments.
What is an earn-out? How and when will I get paid when I sell my IFA?
An earn-out in a financial planning business sale is the period between completion of the transaction and receiving your full consideration. In the majority of IFA or wealth management business sales, this is structured over a one-to-three year period.
The earn-out is designed to ensure client retention over time. The specifics of how it is structured is largely dependent on the type of deal. If it is a pure recurring income sale as a retirement deal, then the earn out will be linked to revenue and/or client retention. If it is a growth-based deal then there will be earn out mechanisms around growth of revenue, recurring income, AUM, or EBITDA.
An example of a fairly typical earn-out structure would be: you receive 50% of your consideration upfront upon completion, then 25% at month 12, and 25% at month 24.
How will I be taxed when I sell my financial planning business?
Please note: This article is for general informational purposes only and does not constitute tax advice. If you require tax advice in relation to a business sale, you should seek guidance from an accountant who can consider your specific circumstances.
If you are a limited company, how your sale consideration is taxed depends on whether the transaction is structured as a share purchase or an asset purchase.
With an asset purchase, the consideration is paid to the company, which means the company pays corporation tax as that money is received. When the proceeds are then extracted from the company, shareholders may also pay Capital Gains Tax, with Business Asset Disposal Relief (BADR) available if the conditions are met. This is why asset purchases are sometimes referred to as involving “double taxation.”
In contrast, with a share purchase, the consideration is paid directly to the shareholders, so there is no corporation tax layer, only Capital Gains Tax or BADR.
If you are a sole trader or partnership, there are no shares to sell so your sale will automatically be structured as an asset purchase. Unlike an asset purchase for a limited company, the consideration is paid directly to the individual owner or partners, meaning there is no corporation tax layer.
Considering your next chapter?
At Chapters Capital, we specialise in financial planning and wealth management M&A.
If you own an IFA, financial planning or wealth management firm, we can help you understand the options available to you, from pre-sale planning and selling your firm to retire, through to sell and stay structures and partnership programmes.
For a confidential conversation about valuation, buyer fit or your route to market, contact our team.
📞 +44 (0)204 519 7811 | ✉️ info@chapterscapital.co.uk
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