Two firms with the same recurring income can sell for very different prices. Owners tend to explain that gap with negotiation skill or luck, but buyers explain it differently: one firm carried more of the attributes they pay a premium for, and the other carried fewer. The spread is real money. Gunner & Co's market data put the average recurring-income multiple at 4.2x in the first half of 2025, the highest since 2018, up from a stable level around 3.5x across 2023 and 2024, and part of what drove that rise was competition for well-prepared firms specifically.
None of the things that raise a multiple are mysterious. Every one of them is checkable in your own records this week, well before a buyer ever sees them. This article works through the ones that appear again and again in offers, in the rough order buyers tend to weigh them. It sits alongside the broader question of what your practice is worth in 2026 and the companion piece on the things that reduce it.
Clean recurring revenue
Recurring income is the base of nearly every valuation in this market: it is the basis for over 80% of offers, and asset purchases of the client bank make up 62.5% of them (Gunner & Co). That is why how recurring income multiples work is worth understanding before anything else. But buyers do not just measure the size of the recurring number; they measure its cleanliness. Clean means ongoing adviser charges, agreed with the client, evidenced in the file, collected reliably, and attached to a service the client actually receives.
The test is simple to run on yourself. Take your recurring income figure and strip out anything that would not survive scrutiny: charges on accounts where the annual review has lapsed, legacy trail with no service attached, fees collected from clients you have not spoken to in eighteen months. If the stripped figure is close to the headline figure, your recurring income is clean and a buyer will treat it as the asset it is. If there is a gap, the buyer will find it in due diligence and price on the lower number anyway, usually with a discount for the trouble.
Consumer Duty made this sharper, not softer. Post-Duty, a buyer inheriting your client bank inherits the obligation to show the ongoing charge delivers value. Recurring income that is defensible under that lens is worth more per pound than recurring income that is not, and the market has already repriced accordingly.
A younger client base
Client age is the multiple-raiser owners most consistently underestimate, which is why it has an article of its own. The mechanics are blunt. A buyer paying a multiple of recurring income is buying future years of that income. A client bank with an average age of 58 has materially more of those years left than one with an average age of 72, where decumulation, drawdown depletion and death are already eroding FUM.
You cannot make your clients younger, but you can know the number, and knowing it changes how you sell. Pull the average and the distribution from your back office. If a meaningful cohort is under 60, evidence it prominently, because it is worth paying for. If the book is older, the honest play is intergenerational: documented relationships with clients' adult children, wealth-transfer conversations on file, second-generation accounts already opened. Buyers price a demographic; they pay more for a demographic with a succession story attached.
Platform and provider consolidation
A firm with 90 per cent of FUM on two platforms is easier to buy than a firm with the same FUM spread across nine platforms, four legacy life offices and a drawer of paper-based bonds. Consolidated assets mean the buyer's integration is a repatriation exercise, not an archaeology project. It also means the buyer's own platform terms, which are often better than yours, can be applied quickly, and that saving is capacity to pay you more.
The check is a single report: FUM by platform and provider. If the tail is long, a deliberate consolidation exercise in the year or two before sale, done properly as advice with suitability evidenced client by client, tidies the estate and raises the price. Done badly or hastily it creates the opposite, a suitability liability the buyer will price against you, so this is a raiser only when it is genuine advice work, not a pre-sale cosmetic.
Documented advice files
Every buyer's due diligence includes a file review, and the file review is where deals reprice. A complete file shows the fact find, the risk profile, the suitability report, the ongoing review notes and the charge disclosure, for every active client, retrievable in minutes. An incomplete file is not neutral; it is a liability estimate. The buyer assumes the gaps they sampled exist across the book, and prices in remediation cost and redress risk.
The FCA's published expectations when client banks are sold reinforce this from the regulatory side: the regulator has said plainly that it will act where client banks are sold with redress liabilities left behind, and that firms must hold adequate financial resources against potential redress. A buyer reading that guidance prices file quality as risk, not as housekeeping. The practical move is to sample your own files before anyone else does. Pick twenty at random, review them as a buyer would, and fix what the sample shows while there is still time to fix it quietly.
Low client concentration
If your top ten clients account for 40 per cent of recurring income, your firm's income has a small number of single points of failure, and each of them is a human being who might die, move, or dislike the new owner. Buyers measure concentration early, usually asking for revenue by client ranked in descending order, and a concentrated book takes a discount or an earn-out structure that shifts the risk back onto you.
The comfortable zone is boring: no single client above a few per cent of recurring income, top ten well under a quarter of the total. If you are concentrated, you cannot fix it quickly, but you can mitigate it: evidence the depth of those key relationships, spread them across more than one adviser in the firm, and be ready for deal structures that hold back consideration against their retention. Concentration is one of the strongest arguments for starting preparation early, which is the territory of the 24-month plan.
A transferable investment proposition
A buyer wants to know what happens to your clients' money the day after completion. If your firm runs a documented centralised investment proposition, model portfolios or an outsourced arrangement with clear governance, the answer is straightforward: the proposition either continues or maps cleanly onto the buyer's own. If instead every portfolio is a bespoke reflection of your personal views, built stock by stock over decades, the proposition is you, and you are the one asset the buyer cannot keep.
Transferability is checkable by a thought experiment. If you were away for six months, could another competent adviser run the investment side from your documentation alone? If yes, your proposition adds to the multiple. If no, expect the buyer to price a transition project, and expect the earn-out to run longer, because your continued presence is what holds the proposition together.
Staff who stay
In an advice business the relationships are the asset, and the relationships are held by people. A buyer looks hard at whether your advisers and support staff will still be there a year after completion, because client retention tracks adviser retention. Firms where the team is contracted, fairly paid, and aware of no reason to leave sell better than firms held together by one founder's goodwill.
This raiser is partly structural and partly honest communication, and the communication side has rules and timing of its own, covered in telling your staff you are selling. Structurally, the checkable items are contracts with sensible notice periods, restrictive covenants that would actually hold, remuneration at market rate rather than suppressed to flatter EBITDA, and no key-person dependency the org chart cannot survive. The FCA's multi-firm review of consolidation, published on Fri 31st Oct 2025, found that poorly managed integration risks poor consumer outcomes, and buyers absorbed that message: a firm whose people make integration easy is a firm they can pay more for.
Realistic pricing expectations
This one raises the multiple you actually receive rather than the one in the headline, and it is routinely the difference between a completed sale and a collapsed one. Owners anchored to a number no buyer will pay do not get a lower price; they get no price, plus a year of wasted exclusivity, plus a firm that is now shop-soiled because the market knows it failed to sell. Buyers pay best for firms whose owners understand how the price is built: what counts as recurring income, how deferred consideration and earn-outs shift risk, why a share sale and an asset sale of the same firm produce different numbers, a distinction worked through in asset sale or share sale.
Realism is also a signal. An owner who can discuss the mechanics of their own valuation calmly reads as a low-risk counterparty, and low-risk counterparties get better terms on everything else: warranties, holdbacks, the length of the earn-out. The preparation is unglamorous, but it is the same preparation as everything above: know your own numbers before the buyer does.
Running the check on your own firm
Treat the eight raisers as a checklist and score yourself against each one from your own records: recurring income stripped of anything indefensible, average client age and distribution, FUM by platform, a random file sample, revenue by client, the six-months-away test on your investment proposition, the state of your staff contracts, and your own honesty about price. Most owners find they hold four or five of the eight and can materially improve two more given a year or two of lead time. That is the practical case for preparing early rather than listing early.
The pillar hub on what your practice is worth collects the rest of the valuation series, including the pieces on how the multiples themselves are built. And if you want a number of your own to react to before you check anything, the free IFA valuation calculator gives you a range and explains the factors affecting it.