Jonathan Barrow Guest Blog: 2015 – Your View on Future Valuations

2015 – Your View on Future Valuations

So 2015 is gearing up to be a hectic market place with sunset clause looming, capital adequacy laws destined to change and the ratchet up of FCA fees. Network members are also witnessing pressure in the form of increased expectation regarding revenue and internal buy out mechanisms being squeezed. I personally believe these variables will impact the landscape more than RDR in terms of businesses coming to market.

As a commercial sales specialist I find this movement fascinating. Commercially, RDR impact has ensured the quality of firms coming to market are of a greater level. However with more business owners looking to make a change this will no doubt benefit the acquirer as we will see more choice of these better businesses, hence the premiums could well be lowered.

I would like to hear your thoughts on valuations in 2015. Do you believe they will stabilise; increase; reduce and what are your views on valuation metrics? Is this the year we will see profit; EBITDA taken into account on a more wholesale basis rather than the legacy standard – a multiple of recurring income?

A final thought. The FCA and Government are clearly working successfully in strangulating elements of our industry. How this impacts the future of the regulated financial industry is a piece I will save for another day.

Jonathan is the Regional Director for the South.