There is a new move to valuing retiring mortgage brokers’ businesses as ‘going concerns’ rather than as relatively small multiples of their loan books which is great news for brokers who are looking to exit the industry.
Currently in the mortgage broking industry in Australia, brokers looking to exit or retire from their businesses are being offered a value based on a multiple of their loan book value, generally between 1.25 and 1.75 times. We have seen an opportunity in the market and we are willing to offer brokers more for their businesses while still getting a good deal in terms of value. It’s a win-win situation.
Retiring brokers now have an exit strategy that is valued at well above current market rates, incorporating the value of a brokerage’s established referral networks and client base. We feel the industry is due for a change.
Brokers work hard to build their businesses and they should be rewarded when they decide to retire or exit the industry. It will also be good for young brokers to know that their efforts will have been worthwhile when it comes to selling their business.
We are currently in discussions with several brokers and welcome the opportunity to speak with brokerage owners looking to sell mature businesses with up to three staff. Other acquisitions will be explored based on scale of operation, expertise, business service contracts and management.
With this new method of valuation, we hope to redefine the way brokerages are valued and create a pricing revolution which benefits all brokers.