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Poor client documentation hurting sale price of practices

Miranda Brownlee
18 March 2016 — 1 minute read

The failure to provide adequate and detailed information about clients is having an impact on the ability of SMSF practices to sell for higher prices or even sell at all, a practice principal has argued.

Paramount Wealth Management principal Wayne Leggett said it can be difficult for potential buyers to obtain demographic information about the practice’s client base in relation to their geographic location, their age spread, the income ranges and their occupations.

“The buyer has to make assumptions about what’s in there and hope for the best, and if that’s what they’re doing they’re not going to pay top dollar because the risk is too great,” said Mr Leggett.


A lack of information on the business is also an issue if the buyer is borrowing money to buy the business, he said.

“If the buyer isn’t using real estate as security for the purchase price and they’re using a loan over the business itself, then any lender is going to want the information themselves in order to make a reasonable valuation,” he said.

Mr Leggett says SMSF practitioners need to collect as much information on clients as possible before selling their business, either from client files or asking the clients to do a quick questionnaire.

“Make sure that all of the relevant information in your data base is up to date, contact details, phone numbers and email addresses – all those sorts of things,” he said.

This makes it easier for the prospective buyer to come along and offer their prospective services to clients, he said, and this is when they decide to buy.

“If there are holes in the data base, it just means it’s going to be more difficult, and therefore they’re not going to be as inclined to pay a premium for it.”

Read more: 

SMSFs still missing out on property tax breaks

Aussie small caps proving valuable for SMSFs

Govt urged to review pension asset test changes

Miranda Brownlee

Miranda Brownlee


Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years. 

Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

You can email Miranda on: This email address is being protected from spambots. You need JavaScript enabled to view it.

Poor client documentation hurting sale price of practices
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