Many advisers now rightly question why they should risk it all, when the government can make their business worthless tomorrow. In fact, I know some advice businesses were worth a lot more a few years ago than they are now.
I’ve noticed that advice firms, which have been found to have defined benefit transfers, have been significantly devalued, for instance.
That is because a large proportion of the buyer market place will not look at purchasing them. This results in a smaller buyer pool and less competition.
If the firm has more than 20 per cent of funds under management with DB, then this often results in up to 20 per cent average value reduction or possibly more
For me, RDR highlights why family business owners should not have the majority of their wealth tied up in a sector that is so willingly interfered with by government forces.
Stephen Hagues is founder of the Retiring IFA
