The cost of treating international visitors
Product Research

What really affects a multiple of renewals?

Although 4 times is usually taken as an industry standard, not all “4 x” are equal. The difference can be accredited to things like:

  • Cash now with mechanism for claw back issues
  • Documentation - especially of privacy and scope of service issues
  • Age of clients
  • Products
  • Persistency
  • Problems of enforcement affecting deal structure           
  • Cash and shares mix

Other factors that affect the multiple of renewals include:

  • X factors - such as brand, referral deals, and technology
  • Bargain basement factors - such as a poor reputation, location, or form of lock-in to an unpopular product provider
  • Age and type
  • The product mix

Increasingly, issues that relate to compliance under the new regime are being named, but these appear premature, as no-one is yet in the market to buy a Financial Advice Provider.

We record, source, comment on books, persistency, size of renewals, comment on transactions – and have dozens from the last two years to generate a range of multiples.  If interested, feel free to email your interest to Jerusalem.Hibru@chatswood.co.nz

Ran

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