Ask an owner what their practice is worth and they will usually talk about FUM, recurring income and the multiple. Ask them about the average age of their client bank and the conversation slows down. Yet every serious buyer will ask for that number early, will model it carefully, and will move their price because of it. Client age is the valuation driver most owners never think to manage, largely because for twenty years it was the thing that made the business work.
That is the awkward truth at the centre of this article. The clients who built your recurring income are the same clients who, viewed through a buyer's spreadsheet, now represent its decay curve. Understanding how buyers think about age, and what you can legitimately do about it, is worth more to most sellers than another round of haggling over the headline multiple.
What a buyer is actually purchasing
When a buyer pays a multiple of recurring income, they are not buying this year's fees. They are buying a forecast: the expectation that the income will still be arriving in year five, year ten and beyond. The multiple is simply a compressed way of expressing how long they believe the income will persist and how fast it will grow or shrink. We cover the mechanics of that in recurring income multiples explained, but the short version is that the multiple is a bet on durability.
Client age is the single biggest input into that durability question, for two reasons that compound each other. The first is mortality: clients do not generate ongoing advice fees indefinitely, and the probability of losing a client rises steeply with age. The second is decumulation: even while a client remains alive, well and delighted with your service, an older client is typically drawing assets down rather than adding to them. Both forces erode the asset base that recurring income is charged against, and neither depends on the quality of your advice.
A book with an average client age of 58 and a book with an average client age of 74 can show identical recurring income today. They are not remotely the same business. One has fifteen or twenty years of fee-paying life ahead of it on the current relationships alone; the other is visibly in run-down, however loyal the clients. Buyers price that difference, and in the current market, where multiples have reached their highest point since 2018 according to Gunner & Co's analysis of H1 2025 deal data, the gap between well-profiled and poorly-profiled books is where much of the negotiation actually happens.
Accumulation and decumulation are different businesses
It helps to be blunt about the two phases of a client relationship, because they behave completely differently in a valuation model.
An accumulating client, broadly someone in their forties or fifties, is contributing to pensions and ISAs, receiving salary rises, possibly inheriting, and compounding investment growth on top. The assets your ongoing fee is charged against tend to grow year on year without you winning any new business. Recurring income from these clients has a natural upward drift. A book weighted towards accumulation can genuinely be worth more in three years than it is today, even with zero new client acquisition.
A decumulating client, typically in retirement, is drawing an income from the same pot. Sensible withdrawal rates still mean the fee base shrinks in most years, and larger calls on capital, care costs, gifts to children, house moves, accelerate it. Add mortality and the picture sharpens: on a book where a large share of clients are over 75, a buyer is not modelling growth at all. They are modelling how quickly the income disappears, and pricing backwards from that.
Neither phase is a criticism of the clients or the adviser. Decumulation is the point of the whole exercise; it is what the accumulation was for. But an owner who says "my recurring income has been stable for five years" while the book ages past 70 is describing a business where new decumulation outflows and mortality have so far been masked by market growth. A buyer will not extend that masking into their forecast, and they will say so during due diligence.
Why the over-75 share gets singled out
Buyers rarely model each client individually at the offer stage. They look at the distribution, and the number they anchor on is the share of FUM held by clients over 75. That cohort concentrates every risk at once.
Mortality is the obvious one, and it is worth being precise about what a client death does to recurring income. It does not merely remove one fee. On death, assets typically leave the advised pot altogether: pensions pass to beneficiaries who have their own advisers or none, ISAs are encashed through the estate, and the surviving spouse, where there is one, frequently consolidates elsewhere or simplifies. The industry's own uncomfortable statistic, repeated in some form at every M&A conference, is that assets rarely stay with the original adviser once they pass between generations. Unless you have deliberately built relationships with the family, the death of a client is usually the death of the revenue, not a transfer of it.
There is also a regulatory dimension that buyers weigh. Older and potentially vulnerable clients attract, rightly, a higher standard of care under Consumer Duty, and any transfer of a client bank has to be handled to the FCA's published expectations, which treat the client bank as the firm's asset and scrutinise how clients are moved. A buyer inheriting a book with a heavy over-75 concentration is inheriting a servicing obligation that is more intensive per pound of FUM, harder to novate smoothly, and more exposed to complaints if the transition is clumsy. All of that lands on their side of the model as cost and risk, and it comes back to you as a lower offer, a longer earn-out, or heavier deferred consideration contingent on client retention.
None of this means an older book is unsellable. Plenty of buyers, particularly private-equity-backed consolidators running large platforms, are comfortable acquiring decumulation-heavy books at the right price. The point is that the price is different, and the structure is different: expect more of the consideration deferred, and expect retention tests measured over the exact period when mortality is most likely to bite.
The numbers owners quote, and the number buyers use
Owners tend to quote average client age, and averages hide exactly what a buyer wants to see. A book with an average age of 66 could be a tidy bell curve centred on people in their mid-sixties, or it could be a barbell: a cluster of 50-year-old accumulators and a cluster of 80-year-olds holding most of the money. Those two books have very different values, and the same average.
What a buyer builds, or asks you to provide, is the distribution of FUM by age band, not the headcount. Fifty small accumulation clients do not offset five large clients in their eighties if those five hold 40 per cent of the assets. Recurring income follows the assets, so the age profile that matters is asset-weighted. If you have never cut your book this way, do it before any buyer does, because it is one of the first analyses a serious acquirer will run and you want to know what it shows before they tell you. This is part of the broader point made in the things that reduce your multiple: the discounts that hurt most are the ones the seller discovers at the same time as the buyer.
While you are at it, look at revenue concentration within the older cohort specifically. A book where the top ten clients by fee are all over 78 has a key-person risk that no amount of goodwill fixes, and it will surface in due diligence whether or not you raise it.
What you can actually do about it
The age profile of a client bank moves slowly, which is precisely why it rewards owners who start early. If you are two or three years from a sale, the following genuinely shift the picture. If you are six months out, they mostly do not, though the reporting points still help.
- Build intergenerational relationships now, and document them. Where an older client's children or grandchildren are known to the firm, hold accounts with you, or have attended planning meetings, the mortality drag argument weakens materially. A recorded family connection turns "this income dies with the client" into "this income has a probable successor relationship". Buyers cannot price what is only in your head, so evidence it: family fact-finds, joint meetings, letters of engagement with the next generation.
- Take on younger clients deliberately, even at thinner margins. A cohort of accumulators in their forties may not excite this year's profit and loss, but it directly rebalances the asset-weighted age profile a buyer will model. Two years of intentional intake changes the distribution enough to notice.
- Make estate and beneficiary planning a service line, not an afterthought. Pension death benefit nominations, expression-of-wish reviews and inheritance conversations are good advice in their own right, and each one puts the firm in the room when assets move between generations rather than reading about it afterwards.
- Segment and report your book the way a buyer will read it. Produce the FUM-by-age-band analysis yourself, refresh it annually, and be able to narrate it. An owner who presents an ageing book alongside a credible intergenerational strategy is in a completely different negotiation to one who looks surprised by their own data.
What you should not do is dress the numbers. Excluding your oldest clients from the recurring income figure, or quietly reclassifying dormant relationships, unravels in due diligence and poisons trust for the rest of the deal. The buyers active in this market have seen hundreds of books; they will find the shape of yours quickly. The win is not hiding the age profile, it is being the seller who understood it first and acted on it.
Where this sits in the overall valuation
Client age does not operate alone. It interacts with everything else covered across what your practice is worth: the strength of your recurring income, whether the buyer values you on revenue or EBITDA, the quality of your data, and the structural choice between a share sale and a structured asset sale to a national acquirer. A young, growing book strengthens your hand on every one of those; an old, concentrated one weakens it, and pushes more of your consideration into earn-out and retention-linked deferred payments. The full list of positive levers is set out in the things that raise your multiple, and age profile runs underneath most of them.
The practical takeaway is simple. Pull the asset-weighted age distribution of your book this month, whatever your timescale for selling. It is one report, it costs nothing, and it tells you whether time is currently working for your valuation or against it.
If you want a number of your own to react to, the free IFA valuation calculator takes your age profile as one of its inputs and explains how it affects the estimate.