Mortgage brokers and IFA’s thinking of selling up and retiring early should think twice if they are relying on the income from the sale.
Research out this month from IFA Portfolio will reveal that the sale of a practice can no longer be relied upon to provide adequate pension for the vendor.
Those hoping to sell up can only expect to obtain around 80 per cent of one year's commission income.
Moreover there is a good chance that it will be substantially less, perhaps only 50 per cent, if there have been mis-selling problems.
The figure, less than half the amount that could have been expected just three years ago, is 25 per cent less than the going rate being obtained by general insurance brokers.
Ted York, IFA Portfolio managing director, said: "It is important for brokers to develop a greater proportion of non-regulated business if one is considering a future sale. It is also possible to keep general branch business as a lifetime annuity as the administration work is minimal and there is no annual review or renewal procedure needed."
