Family Office Coaching with Lance Meikle

What multiple of revenue does a Family Office sell for?

August 11, 2020


If you’re a Financial Planner, Accountant or Mortgage Broker and interested in having a business that has a saleable revenue of 9 to 12 times or EBIT of 5 to 6 times, Family Office is the structure.

Why is it that Financial Planning leads the way with revenue multiples?

  • Engagement | discussions | pro-active and caring nature of the human being delivering the advice and value proposition. Clearly there are, have been and will be bad eggs (as there are in every industry where money is involved) however overall, most of the financial planners that sell | deliver | provide personal advice meet the definitions I just used:

    • Pro-active, engaged and caring

Yes, digitization is (and will continue to) have a short-term negative impact of the current multiples. However, with millennials being natives and making up 76% of the workforce from 2023 in Australia, the very thing called digitization will simply become a standard thing, a bunch of tools that will make up what is called ‘a digital ecosystem’. In my view, the revenue multiple will not change significantly for this cohort however it will go to zero for financial planners who don’t build | provide a digital ecosystem.

Whilst I believe revenue multiples will remain similar for those that operate in a digital ecosystem, the gloom for the audience is that the price point applying to the multiple (called revenue) will be exponentially lower (my forecast is circa 50% lower) as a result of the very thing that saved the multiple from dropping – digital.

Price points are already being savaged, and will continue, until we see the bottom. If my forecast is correct, this means that if you purchase revenue for 2 times and provide the very best value proposition to your clients, you will be paying off a loan that is 100% overvalued or put another way, you paid 4 times for the revenue.

Buying revenue and overpaying 100% is not good business however if do purchase revenue and pivot to an additional service offering called Family Office, you will not only retain existing price points, you can increase the price point.

To buy or not to buy revenue? If you believe that the price point of personal financial advice is going up, go forth. If not, keep listening.

The opportunity for higher revenue multiples sits with both Accountants and Mortgage Brokers if they pivot. Due to the personality type and both the service, and value proposition, it is my view that Mortgage Brokers will win this race for the same client. There has already been an increase (albeit gradual) in revenue multiples for mortgage brokers and it is my view that this will continue.

Debt to income ratios in Australia and most OECD member countries is at an all-time and is continuing its climb with no sign of abating due to consumerism and social status. As a result of this trend, clients want to know how much they can borrow to ‘get more’ and as such, the lending specialists | mortgage broker is in the box seat to utilize the captured data and engage utilizing digital tools.

I have never come across a client yet who is excited about either meeting with or going to an Accountant. This value proposition needs to change for Accountants and is. Behind the scenes the leading associations and consultants to the Accounting profession are on to it and strategically trying to get Accountants to pivot and understand that engagement is where it is at NOT ’36 &/or ’97 Tax Acts.


The mortgage broker (like the Accountant) has a limited awareness of Family Office (for now) and as such, is under threat that a business like Generational comes along and provides 17 services to their client (that includes their offering as simply one of the 17) and

The game of cat and mouse is whoever touches your client first as the Adviser Concierge will win the higher revenue battle.


Family Office = 9 to 12 times | why?

  • Family office clients are incredibly sticky due to the nature of the complexities and relationships and the high barrier to entry to become a client
  • There are 3 to 4 generations of income
  • A legacy is NOT an inheritance (accounting | financial planning)
  • Collaboration between numerous professions, commands a premium over sending clients away to do things themselves
  • The fluency and pro-active approach towards a family enterprise (i.e. Family Office), commands a premium
  • Generational offers 17 services and solutions, NOT 1
  • A true one stop shop for both existing and future family members
    • Meeting to email to phone call to email to meeting to email to phone call …………… and this is every time for every professional

      • Accountant
      • Insurance broker
      • Financial Planner
      • Lawyer (not specialists)
      • Valuer
      • Etc etc etc
    • It is a structure | vehicle for smooth intergenerational transfer of wealth and elimination (or reduction) of intra-family disputes
    • Family offices are the fastest-growing investment vehicles in the world today
      • Investment decisions of a Family Office

        • Short-term = 20 years
        • Medium-term = 50 years
        • Long-term = 100 years
      • Confidentiality is ensured under the family office structure, as wealth management and other advisory services for the family members are under a single entity

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