The market is competitive. Quality parcels attract multiple buyers and sell quickly, sometimes before they’re ever advertised. That pressure produces two opposite errors: paying a premium price for a fee base that isn’t premium, and moving so fast on a genuinely good business that the transition is under-planned and the clients leave anyway.

Here are the eight I see most often.

1. Buying capacity you don’t have

The maths is brutal. On a $500,000 parcel bought at 1.1 times fees, losing 20% of clients in year one costs roughly $110,000 of purchase price value and $100,000 of annual revenue.

The most common cause isn’t a bad fee base. It’s a buyer who couldn’t service it properly in the first busy season. Before you look at anything, count your genuinely available chargeable hours, not aspirational ones, and name the person on your team who will own these clients. If the answer is “me”, you have a problem before you start.

2. Treating all fees as equal

Not every dollar in a fee base is worth the same. SMSF administration attracts the highest multiples in the Australian market, typically around 1.2+ times, with general accounting, tax and audit around 0.8 to 1.1 (ANZ). Predominantly advisory or project-based books can fall as low as 0.3 to 0.6 (Miro Capital).

Ask for three years of fee data with a clear recurring versus one-off split. If a vendor presents a headline fee figure that includes last year’s restructure work and a business sale, you’re being asked to pay a recurring multiple for revenue that isn’t coming back.

3. Under-investigating principal dependency

You’re buying relationships. The question is whose.

For each significant client, establish whether the relationship sits with the principal personally, with a staff member, or with the firm. Fees attached personally to a departing principal carry materially higher transition risk and if that principal is retiring rather than continuing in the industry, the risk is entirely yours.

4. Leaving the transition to goodwill

Retention is won or lost in the first six months after settlement, and almost all of it depends on what the vendor does.

Most principals transition over nine to twelve months in a reduced capacity. Don’t leave that as an understanding. Write it into the contract as deliverables: a specified number of personal client introductions, days on site per month, joint communication signed by both parties, defined response times, and a fallback if the vendor becomes unavailable.

A vendor who is counting down the days will cost you clients. You’ll usually sense that in the first meeting. Trust it.

5. Sloppy retention definitions

Almost every deal has a retention adjustment. Very few have one that’s properly defined.

Measured by client count or by fee value? At what date? Are clients excluded if they leave because they died, retired, sold their own business, or went insolvent? Is the adjustment proportionate or a cliff edge at the threshold?

Clawback thresholds commonly sit around 80 to 85% retention (Miro Capital). The difference between a well-drafted and a loosely drafted retention clause is frequently larger than anything you’ll win on price.

6. Ignoring the staff liabilities

Confirm precisely which employees transfer, on what terms, and who bears accrued annual leave, long service leave and superannuation. This is one of the most common and most expensive oversights in fee parcel acquisitions. A six-figure surprise that surfaces after settlement.

While you’re there: check whether the team is a cultural fit. In a market where recruiting qualified accountants is genuinely difficult, an intact experienced team may be worth as much as the fees. Losing it in month two is a double cost.

7. Underestimating the true cost of the files

Sample some workpaper files across different client types before you commit. Their quality tells you what your first year of effort will actually be, and therefore your real cost of acquisition.

Check data migration seriously too; cloud or desktop, who does it, who pays, and how long it takes. Whatever you’re quoted, budget more.

Also confirm the vendor’s professional indemnity run-off cover extends to claims arising from pre-settlement work, generally for up to seven years (CPA Australia). Get it named in the contract.

8. Rebranding and re-pricing too early

Two things not to do in the first year: change the name on the door, and change the client’s regular contact person.

Both feel efficient. Both cost clients. If the fee book is underpriced, and it often is, you can address that in year two, once you’ve earned the relationship. Do it in month four and you’ll fund your competitors’ growth.

Before you make an offer on anything

The Fee Parcel Acquisition Checklist runs through 47 questions across seven areas: the fee base, client quality and retention risk, the vendor and transition, staff, systems and compliance, price and structure, and the first 100 days after settlement. It includes indicative pricing bands by fee quality and the specific structural protections worth considering.

It’s the same list I’d take into a meeting on your behalf.

And if you’d like to see suitable parcels before they’re advertised, you can register your acquisition criteria confidentially. Most quality books are presented to the buyer register before they ever reach the market.

Join the confidential buyer register and download the Fee Parcel Acquisition Checklist

General information only — not financial, legal or valuation advice.

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