Selling your brokerage? Trail book valuation needs a second face

Trail book valuation is a multiple of annual trail, and the median was 2.39 times in January 2026, with buyers paying close to three. That price assumes the clients stay once you go. When every client only knows you, the book is worth less, so the seller who protects the price hires a second broker two to five years out.

The bottom line: A buyer pays for trail that keeps arriving after the founder has gone, and a book whose clients only know one broker gives them less reason to believe it will. FinTalent’s view is that the strongest protection a principal controls is a second broker the clients already know, hired two to five years before the sale.

How is a trail book valued in 2026?

A trail book is priced as a multiple of the trail it pays each year. TrailBlazer Finance runs a trail book marketplace and lends against books. It analysed 300 valuations and 40 sales across three financial years, and told Mortgage Professional Australia in January that the median valuation multiple was 2.39 times, up from 2.3 in FY24. Buyers were paying an average of nearly three times, and TrailBlazer was seeing six or seven buyers for every book it put up for sale.

TrailBlazer earns its living when books change hands, so read those as a marketplace’s numbers. In a sponsored interview in The Adviser it put sale multiples anywhere from 1.9 to 3.7 times annual trail. The spread comes down to the book itself, meaning how old the loans are, how fast they run off, the clawbacks, the growth and the spread of lenders.

For a feel of the dollars, our trail book calculator starts from the 0.15% a year average trail on our salary guide. A $50 million book at that rate pays about $75,000 a year, which comes to about $179,000 at the median multiple. The MFAA’s State of Mortgage and Finance Broking report, which covers calendar 2025, put median gross trail revenue per broker at $77,894, up 18.7% on the year before (MPA’s coverage).

Every factor that moves the multiple comes back to the one thing a buyer is asking, which is whether the trail keeps arriving after the sale.

Why do trail books lose value over time?

Loans leave, and each one takes its trail with it. A refinance, a payoff or a property sale ends the income on that loan, which is why MPA’s January piece called trail books a wasting asset when nobody keeps topping them up. TrailBlazer measured average run-off above 25.5% of loan balances in FY24 and back under 23% in FY25. FY24 was also the heaviest refinancing it had seen in 15 years, with around a quarter of all loans switching lenders.

Clawbacks come off the other end. TrailBlazer’s clawback rate rose from 7.53% to 10.11% in FY24, then edged up to 10.15% in FY25. It reads 5% or less as a healthy book, 5% to 10% as good to average, and anything above 15% as a sign of churn. The MFAA measured clawbacks at industry level for the first time in its 2026 report, and the median gross clawback per broker rose 16.5% to $11,442 in 2025 (Australian Broker).

TrailBlazer’s figures side by side, from the same January interview:

Run-off does not always mean a client walked. A broker who had been self-employed for more than a decade told us their trail had run down because clients paid their loans off, and was clear the clients had not left them. Another broker in our guide to what your split is really buying watched their trail shrink as clients refinanced away.

A buyer prices both kinds the same way. A book that is not being fed new loans, by someone the clients trust, is worth a little less every year.

What happens to the value when the broker is the business?

TrailBlazer’s own succession guide is blunt about it: “If the broker is the business, the value is usually limited.” Its list of what drags a valuation down includes clients who ask for the principal by name, a principal who writes most of the new volume, referrers who only deal with one person, and a business that would struggle if the owner took a month off.

Ash Playsted, co-founder of Recludo Group, which takes stakes in brokerages, told MPA in April that most brokers mistake the idea of selling their trail book one day for a succession plan. Playsted’s answer is a business where clients deal with the team and the brand as well as the founder. AFG’s succession guide has its partnership manager Ian Cornwall making the same point more bluntly, that a business becomes valuable once its owner is irrelevant to it.

All three have a stake. TrailBlazer sells and funds books, Recludo buys into brokerages and AFG runs its own broker investments program. They still land on the same advice for a seller.

Principals tell us the same thing from experience. The founder of a property-and-finance group told us they had built successful books and then sold them, because the broker who managed those clients was leaving, and they started again. A regional principal told us they would rather let an incoming broker keep their own book than buy it, because if the broker did not like the business and left, the principal would have paid for “an asset that’s going to get stolen”.

A buyer does the same maths about you. It is the seller’s half of the people risk nobody models in a brokerage acquisition. If the clients only know you, the buyer is paying for relationships you are about to take with you.

Why hire a second broker two to five years before you sell?

Moving a client relationship takes years, and a buyer can see whether it has moved. TrailBlazer says the brokers with stronger succession outcomes start planning two to five years before they sell, and one of the things it tells them to do with that time is introduce clients to more than one person in the business.

That window lines up with TrailBlazer’s numbers on loan age. It puts a loan at its stickiest between 24 and 60 months old, past the early refinance risk and not yet paid down far. A second broker who starts three years before a sale can be on the phone for the reviews, the repricing and the anniversaries across that window.

A process manual will not carry this on its own, because the client picks up the phone to a person. That person needs to have written some of their loans, sat in some of their reviews and taken their calls while you were on leave.

This is a different hire from the first operations hire. The ops hire runs the business so it stops depending on you. The second broker carries the clients so the book stops depending on you. A principal heading for a sale usually needs both.

We have run this search. Early on, one client described the seat as someone to essentially take over from the founder, in a staged succession rather than an exit. The founder was not selling, but the brief was the one a seller needs, a broker who could carry the relationships of a founder who could not put them down and answer clients the same day the founder would have. Joe ran that search himself, as he runs every one of ours.

There are more brokers to hire from than there were. The MFAA counted 24,116 brokers in 2025, up 9.1%, and the number aged 50 and over fell while the 18 to 25 cohort grew. Brokers working in multi-broker offices rose 17% in the year, taking their share to 56.8% of classified brokers, while sole operator numbers stayed broadly flat (MPA).

The pay bands for a broker senior enough to take a client end to end, and what the first 90 days of a handover should look like, are in our guide to hiring a senior broker. Two to five years gives the clients time to learn a second name before a buyer asks for one.

Should you buy a broker’s trail book when you hire them?

Usually not on day one, and both sides of the table tell us why. The regional principal above would rather the broker kept their book and took a share of the upfront on clients they brought across, because a book bought at the start can walk out the door. Brokers raise the same fear from the other side. Two we spoke to in the past year were worried about selling their book at the start of a new job. One had been offered a seat by a business that wanted their trail from day one. Both put it the same way, that if the job did not work out they would be left with nothing.

Trail ownership is rarely as clean as either side assumes, which is why it belongs early in any plan for recruiting experienced brokers. The order that works for both sides is to hire, let the broker settle in, and talk about the book once each of you knows the seat works.

The second broker in a succession plan carries a version of the same fear. They are building relationships with clients whose trail they do not own, which is the biggest question a good broker asks when weighing up switching brokerages. Put their upside in writing before they ask, whether that is a share of the trail they help keep, a path to equity or first right to buy part of the book, and write it into the contract alongside the clawback and trail terms. In that search the long-term upside was mapped with the client, on the record, before any broker could ask.

What should a principal do if the sale is two to five years away?

Start with the numbers, then the people.

1. Put the book through the trail book calculator, then pull run-off and clawback from your aggregator reports and check them against TrailBlazer’s bands.
2. Count how many of the clients who refinanced, repriced or had a review in the last year dealt with anyone other than you.
3. Hire the second broker now, senior enough to take a client end to end. Our mortgage broker recruitment page sets out what we look for in one.
4. Write down what the second broker gets out of the book before they ask.
5. Introduce them yourself, by name, on the next call with each client, and keep doing it until clients start ringing them first.