The headline is straightforward. Gunner & Co reported an average recurring income multiple of 4.2 times in the first half of 2025, against a stable figure of around 3.5 times across 2023 and 2024, describing it as the highest point since 2018. Chapters Capital, working from more than 100 transactions, puts 4 times as essentially the norm.
A rise of that size in eighteen months is worth understanding rather than simply enjoying, because an average is not an offer and the conditions that produced it are not permanent.
What actually drove it
Competition for a narrow set of firms. The demand is not spread evenly across every firm for sale. It concentrates on well-prepared businesses with clean data, documented advice, a transferable client bank and a service proposition a buyer can absorb. Gunner & Co names competition for well-prepared firms among the drivers. What rose is substantially the price of being easy to buy.
Post-Consumer-Duty clarity. Gunner & Co also points to clarity following Consumer Duty. This is worth reading carefully: the effect is not that the regime made firms more valuable, but that it removed a layer of uncertainty about what a compliant advice business is required to demonstrate. Uncertainty is priced as risk. When it resolves, buyers discount less.
Capital looking for the sector. EY's analysis records UK wealth and asset management deals rising from 47 in the first half of 2025 to 61 in the first half of 2026, with disclosed value moving from £0.2bn to £22.7bn. EY's own commentary describes investors drawn to the sector's long-term growth potential and opportunities to expand. More buyers with more money bidding for a limited number of well-prepared firms produces exactly the movement observed.
Why your firm may not have felt it
An average is made of a distribution, and this distribution is wide.
Chapters Capital's figures make the point about size directly: recurring income remains the basis for most firms, but businesses with more than £400,000 of recurring income will likely be valued on an EBITDA basis instead, at 7 to 8 times, with multiples north of 10 times for the strongest. Two firms of different sizes are not on the same scale at all, so a rise in the average recurring income multiple may say nothing about the larger one.
Within the recurring income group, the spread is driven by the things covered in what raises your multiple and what reduces it. Client age, concentration, data quality, documented advice, and how transferable the relationships actually are. A firm at the wrong end of those factors did not receive 4.2 times in the first half of 2025 and will not receive it now.
The honest summary is that the market rewarded preparation, and reporting the reward as a market-wide uplift makes it sound like weather when it is closer to a skill.
What would take it back down
Four things, in rough order of likelihood.
The cost of money. A meaningful part of consolidation has been funded with debt. The FCA's multi-firm review raises concerns about debt-funded acquisitions and about pressure on regulated entities required to upstream cash to service external debt. Acquisition appetite funded that way is sensitive to the cost of borrowing in a way that appetite funded from retained profit is not.
Regulatory attention to the buyers. The same review found that consolidation can support efficiency and sustainable growth, but that poorly managed integration risks poor consumer outcomes, and it expects firms to reassess risk management and group structures. It introduced no new rules. But a buyer spending management time on its own group structure is a buyer doing fewer deals, and the effect on demand is the same.
Supply catching up with demand. Prices rise when there are more buyers than sellable firms. A wave of owners deciding at once that this is the moment changes that ratio.
Tax and timing effects. Business Asset Disposal Relief moved to 18% for disposals from Mon 6th Apr 2026, from 14% for disposals in the preceding year and 10% before that. Changes of that kind move when people sell as much as whether they sell, and clustering affects the balance of supply and demand in both directions. What the 2026 rate change means covers the detail.
What to do with this
Not to time the market. Owners who try to sell at the top usually discover that preparing properly takes longer than the window they were aiming at, and a well-prepared firm sold in an average market comfortably beats an unprepared one sold in a strong one.
The useful reading is narrower: the premium currently available is a premium for being straightforward to buy. That is entirely within your control, it takes eighteen months to two years to build, and it survives a change in conditions. The 24 month version of that work is in the 24 month plan.
The figures above are as reported at the dates given. Averages move, and this site's free IFA valuation calculator deliberately produces a range rather than a single number for exactly that reason.
What an average cannot tell you
There is a specific trap in reporting of this kind, and it catches sellers repeatedly.
An average multiple is calculated across the firms that actually transacted. It is not a survey of what every advice firm is worth. Firms that went to market and failed to sell do not appear in it. Firms that received a disappointing offer and withdrew do not appear in it. What is being averaged is the population of successful deals, which is systematically the better-prepared end of the market.
That does not make the figure wrong or misleading. It makes it a measure of what prepared firms achieved, which is exactly how it should be read, and not a benchmark that any firm is entitled to.
The second limitation is that a multiple is only half of a price. Four times a recurring income figure that diligence subsequently reduces is not four times the number you started with. Much of the negotiation that follows an offer is about the base rather than the multiple, and a firm with clean, reconciled, well-documented income defends its base far better than one without. This is the mechanism by which preparation converts into money, and it is largely invisible in any published multiple.
The third is structure. Two offers at the same multiple can be worth materially different amounts depending on how much is paid at completion, how much is deferred, what the deferred part is measured against, and how likely it is to pay. A higher multiple with a large performance-linked element can be worth less than a lower one paid in full, which is covered in what debt-funded consolidation means for sellers and when an earn-out underperforms.
Reading the market for your own firm
The practical translation of all of the above is short.
Treat published multiples as a description of conditions rather than a quotation. Assume you sit within a range rather than at a point, and that where you sit in it is determined by factors you can list and mostly influence. Expect the base as well as the multiple to be negotiated. And judge offers on the amount likely to reach your account rather than on the headline, which is the entire purpose of modelling the deal at zero deferred consideration.
The market has been good to prepared sellers. It has been ordinary to unprepared ones, in the same months, at the same average.
One final point on timing, because it is the question this article tends to prompt. The conditions described above are observable now and were not predicted three years ago, which should temper any confidence about predicting them three years forward. What is predictable is the effect of preparation, because it works in every market: clean data, documented advice, spread relationships and a transferable client bank raise the price in a strong market and protect it in a weak one. That is the only part of this you control, and it is the part that pays in both directions.
Read next: who is buying UK advice firms, what debt-funded consolidation means for sellers, and the rest of the market pillar.