Valuing a trail book isn’t a straight formula, and in this market, relying on assumptions could cost you dearly.
Whether you’re looking to buy, sell, or simply understand the value of what you’ve built, trail book valuations are influenced by far more than just revenue figures. Over the years, and through countless transactions I’ve been involved in, I’ve seen just how varied outcomes can be when people rely on surface-level estimates, or worse, when they underprice what they’re worth by selling to a friend without market testing.
At buythebook, we’re now seeing a clearer picture of where different sectors are trading and what’s driving premium (or discounted) results. Here’s a breakdown of what’s shaping trail book valuations across the financial services industry in New Zealand and Australia:
real_estate_agentMortgage Books
Valuation Range: 1.8x – 3.0x of annual trail revenue
Trail books with consistent revenue, low clawback exposure, and good client retention attract the higher end of this range. Buyers place a premium on clean data, diversified lender mix, and whether the selling broker is exiting or continuing to write, as this impacts retention risk.
Key Drivers:
- Run-off trends
- Clawback liabilities
- Aggregator relationships
- Restraint clauses and rewrite risk
health_and_safetyLife Insurance Books
Valuation Range: 2.5x – 4.5x of annual commission income
Long-standing life policies with good persistency and cross-product mix (life, TPD, trauma, etc.) are in high demand. Where lapse rates are high or where clawbacks are active, pricing quickly drops.
Key Drivers:
- Policy age and lapse history
- Commission structure and volume
- Adviser’s involvement post-sale
- Compliance record and documentation
" I’ve seen just how varied outcomes can be when people rely on surface-level estimates, or worse, when they underprice what they’re worth by selling to a friend without market testing. "
account_balance_walletWealth / Investment Advisory Books
Valuation Range: 4x – 8x of annual recurring revenue
Valuations here skew higher due to the stability of fee-for-service income and asset-based charging models. Books that include high-net-worth clients or structured AUM contracts often attract significant interest from firms seeking long-term growth.
Key Drivers:
- AUM (Assets Under Management)
- Client segmentation and longevity
- Recurring revenue vs. project fees
- Licensing structure and compliance
policyGeneral Insurance Books
Valuation Range: 3x – 7x of annual commissions
Books built around SME portfolios or diversified personal lines are generally more attractive. Where the income is tied to a single underwriter or where commission compression is evident, buyers may take a cautious approach.
Key Drivers:
- Renewal rates and policy volume
- Type of policies (business vs personal)
- Claims history and client service models
- Churn and digital transition readiness
calculateAccounting Practices
Valuation Range: 0.8x – 1.2x of gross revenue
While not traditionally classed as trail books, accounting firms with predictable year-on-year income are valued similarly. Books with recurring SME advisory, tax, and cloud-based services are commanding higher multiples.
Key Drivers:
- EBITDA margins
- Staff capability and transition plan
- Cloud-based systems and client portals
- Client industry spread
villaRent Rolls (Property Management)
Valuation Range: 2.5x – 3.5x of annual management fee revenue
Management income tied to quality properties with low vacancy and strong tenant retention tends to hold value well. Multiples are influenced by geography, arrears rates, and the operational efficiency of the agency.
Key Drivers:
- Properties under management (PUM)
- Vacancy rate and rent roll churn
- Staff turnover and continuity plans
- Fee model (flat vs. % based)
- Rent arrears
- Vacancy
- Maintenance model (minimum work)
- Compliance (up to scratch for healthy homes and RTA)
warningA Word of Caution
" I’ve seen too many advisers agree to sell their book to someone they trust, a friend, colleague, or staff member, without understanding what it’s actually worth. Without testing the market or getting a valuation, you could be leaving tens, if not hundreds, of thousands of dollars on the table. "
Even if you plan to sell privately, it’s critical to know your value before you commit.
How buythebook Helps
At buythebook, we’ve built a platform that helps you:
- Get a confidential, data-backed valuation
- List anonymously and let buyers compete fairly
- Offer pre-approved funding to buyers, helping close deals faster
- Protect your future, whether you’re selling, scaling, or staying
Valuation isn’t just about revenue, it’s about preparation, positioning, and knowing how your book stacks up in the current market.
If you’re thinking about selling or expanding through acquisition, don’t rely on guesswork.