1. What is Your Business Really Worth? Alan Kenyon Kenyon Prendeville 24 th November 2006

2. Agenda Kenyon Prendeville’s Experience Valuation methodology Market pricing Key drivers for business value Current market Buyers – want/challenges Sellers – want/why deals fail & key success factors Current & future issues Future for buyers & sellers Questions

3. Kenyon Prendeville’s Experience 57 transactions $3.8 billion FUM Business value $65 million Averaged 35% growth in gross revenue 12 month post settlement 98% client retention

5. Valuation Methodology Multiples: Financial Planning: 2 to 4 times recurring revenue Risk: 2.5 to 3.25 times renewals Accounting: 0.65 to 1 times fees General Insurance: 1.25 to 1.65 times fees Mortgage: 1.8 to 2.5 times trails

6. E.B.I.T:4 to 8 times N.P.A.T: 8 to 12 times Maintainable Earnings Others: Capitalisation Discounted cash flow Valuation Methodology

7. Recurring Revenue 49 E.B.I.T (earnings before interest & tax)8 Most Used Methodology

8. Key Profitability of buyers business post acquisition Why Mostly Recurring Revenue & Not E.B.I.T?

9. Internal succession External succession Additional business locations When is E.B.I.T Most Relevant?

10. Summary Market Pricing 12month average FY 20053.00 12 month average FY 20063.31 6 month average Jan – Jun 2006 3.45 Victoria 3.22 New South Wales3.12 Queensland3.35 South Australia3.48 Western Australia 3.29 (excludes internal dealer transactions)

11. Transparency of Business Client segmentation Client profitability Service & pricing segmentation Product segmentation Client relationships Key Drivers to Business Value

12. Source of Business Referral relationships Staff profile Practice management / efficiencies Business opportunities Key Drivers to Business Value

13. Current Market Environment 1,600 registered buyers 20 plus enquires for every listed business 3 – 4 meet vendor Only 2 go to due diligence post indicative offers Post due diligence, call for binding offers Enter heads of agreement Contract of sale HIGHLY COMPETITIVE SELLERS MARKET

14. Renovators delight Platformed and efficient Cultural fit – business opportunity Types of Buyers

15. What Buyers Want Cross selling opportunities Business scale (growth) Economies of scale (admin) Platform migration Free cash flow after financing costs

16. Profile own business Demonstrate prepared Initial meeting - Agenda – past, present, future of each party Last chance for first impression Challenges For Buyers

18. Challenges For Buyers (Journey) First meeting Indicative offer Binding offer Sales contract Integration

19. What Sellers Want Transparency of buyers business/history Confidence – re: stakeholders – clients, staff, family Confidence can finance Business to go to next stage Open and honest communication Commitment

20. Why Deals Fail Cultural misalignment Unrealistic expectations Lack of preparation Owners negotiate Intimidation Timeframes Poor communication Finance No professional help

21. Key Success Factors Develop a strategy Preparation Realistic expectations Business as usual Flexibility/lateral solutions Finance in place Negotiable/non negotiable Legal advice at conclusion Future vision Professional help

22. Conflict of interest Talent shortage Dealer relevance Westpoint Industry funds competitive position Succession Current Issues

23. Business values EBIT orientated? New brand competitors (Virgin, Myers, Wizard) Increased compliance Adviser margin squeeze? IMA’s widely accepted by HNW’s Advice fees not linked to FUM but service? Future Issues

24. What Does The Future Hold Buyers/Sellers? If 1 in 2 owners will exit in 3 to 5 years? Will the number of buyers decrease? Will this lead to more sellers than buyers? Will this mean lower prices? Will future valuations focus on profit not recurring revenue?

25. Growth industry Consumers need for FP increasing Boutiques are moving to second tier dealer groups and forming breakaways IDGR’s supporting advisers to acquire businesses Industry change from product to advice model Growing number of younger, ambitious advisers What Does The Future Hold Buyers/Sellers?

26. Summary You don’t buy, sell or merge your business everyday, you only get one chance Get professional assistance Cultural “fit” and business opportunities are for both parties critical Success or otherwise will be determined 12 months post transaction Stay on track

28. Questions