Valuation multiples in the IFA M&A market have risen to their highest point since 2018, according to the latest data from Gunner & Co., the UK’s leading M&A brokerage and consultancy for financial planning firms.

The average multiple for prices based on recurring income has climbed to 4.2× in H1 2025, up from a relatively stable 3.5× seen in 2023 and 2024. This marks a significant uplift and signals renewed confidence among buyers.

Louise Jeffreys, Managing Director of Gunner & Co. commented, “The rise is driven by increased competition for high-quality, well-prepared firms. With greater clarity following the implementation of Consumer Duty and a stabilisation in the regulatory landscape, buyers are feeling more confident in pricing.

“The reduction in the cost of debt is now showing through in the multiples being offered.  Furthermore, many buyers are approaching the end of their investment cycles, and with the new trend of deal values including the value of acquisition pipelines, buyers are negotiating hard to secure opportunities.”

Turning to deal structuring, Gunner & Co’s deal analysis shows that so far this year has seen a notable shift toward asset purchases, which currently comprise 62.5% of offers. This may reverse the gradual decline in asset deals observed from 2017 to 2023. The surge in share purchases seen last year may have been a short-term response to increased buyer liability introduced by recent FCA updates. “Many buyers have increased their AUM threshold for considering a share purchase, and a handful of buyers are making above-market offers for asset purchases, further fuelling this increase,” added Jeffreys.

Recurring income has strengthened its dominant position in valuation approaches, currently accounting for over 80% of offers, well above the 65–75% range observed in recent years. This trend reflects buyers’ preference for simplicity and predictable revenue streams, particularly in smaller acquisitions. Meanwhile, profit-based valuations have declined to 12.5% of deals analysed, compared to 24% in 2024 and a three-year average of 27.5%.

Jeffreys added “The retirement wave continues to shape the IFA M&A landscape. These principals want clean exits, and recurring income valuations provide that simplicity and clarity. For many buyers, especially of smaller firms, recurring income provides a more meaningful basis for value than profit. That’s why we expect this trend to persist.”

Gunner & Co.’s latest survey report confirms that retirement remains the biggest motivation for sale. While significant large-scale mergers are still taking place, the shape of the market, which is driven by a high volume of retiring principals from smaller firms, may continue to support the dominance of recurring income as the primary valuation approach.

 

If you are looking to sell your business, find out more about the selling process and how Gunner & Co. can help you. Book a meeting with our Head of Brokerage Gwill here