Life books are still in demand, although people selling them now face tougher due diligence, Connect Financial Service Brokers CEO Paul Tynan says.

“There is still a demand for life books with more buyers seeking fewer available opportunities,” he told insuranceNEWS.com.au.

“But one growing trend is stronger due diligence. It has definitely gone up a few notches.

“Prospective buyers are undertaking rigorous analysis of potential acquisitions compliance framework, office systems, staff and business compatibility.”

Mr Tynan says due diligence on a recent deal he handled took eight months, despite the fact that both the seller and the buyer were willing.

“Buyers are really checking the quality of the books, and that is reflected in the prices that are being offered,” he said.

“If an old ‘lifer’ is thinking of selling their book, nobody now gets four times the value. But there are still more buyers out there.”

One area where those buyers are coming from is the institutions.

“Recently I have seen a spike in enquiries from advisers looking to purchase books of clients outside of their institutions because of the pricing and quality of internal books,” he said.

“Institutionally owned dealer groups [should] mentor individual advisers who are keen to learn more about the non-aligned sector.”

Demand for books is also coming from accounting practices keen to expand their businesses, but the lack of confidence about buying financial planning practices is holding them back, Mr Tynan says.

“But during recent months, Connect has been approached by a number of accounting businesses seeking to expand their client offering with financial planning,” he said.

“This trend is on the increase and the future will see a marked upsurge in accounting and financial planning advice disciplines merging under a professional holistic advice firm structure.”