Demand for life insurance adviser practices are “unprecedented”, according to Forte Asset Solutions Director Stephen Prenderville.

“Every second day I receive a call from a buyer looking for a life insurance practice,” he told insuranceNEWS.com.au. “People are attracted to the robust nature of the revenue streams.”

Mr Prendeville says life practices are attracting prices of 3.5 times revenue or more, compared to pure investment advice businesses that are selling for three times income streams.

“I recently sold a life practice for 3.75 times revenue and one in Sydney for 3.5 times,” he says.

“The stronger price for life practices is due to the potential growth in income and the opportunities to cross-sell investment advice.”

Practices with lapse rates of less than 5% and an age demographic of up to 55 are the most keenly sought.

Other financial planning practices looking to increase their business are forcing out institutional buyers.

“It is practices buying practices with the institutions helping with finance,” Mr Prendeville said. “To build a successful life practice takes years and it is easier to acquire than to grow a business.”

He says the lack of inflow in investment-based financial planning practices has led to moves to diversify business models.

But the strong demand means that businesses for sale are becoming very rare.

“I have none on my books at present,” Mr Prendeville says. “Underwriters will try and introduce them to an aligned adviser when they hear one is coming up for sale.

“As a result, very few life practices are coming on to the market.”