M&A advisors in Australia typically charge a monthly retainer of $10,000 to $40,000 during the sale process, plus a success fee of 2% to 5% of the transaction value on completion. Some use a Lehman formula, a sliding percentage that falls as deal size rises. For a $20M sale, total fees usually land between $500,000 and $800,000. M&A Concierge's referral rate is paid by the advisor, not the owner, and is uniform regardless of deal size.
How M&A advisor fees work in Australia
Most M&A advisors working in the Australian mid-market are paid in two parts: a retainer while the sale is running, and a success fee when it completes. The retainer covers the work of preparing and marketing your business. The success fee rewards the outcome. Understanding how the two fit together is the difference between comparing advisors on price and comparing them on value. Fee structures vary by advisor, deal size and complexity, so treat the numbers below as typical market ranges for businesses with $2M to $25M in EBITDA rather than fixed rates.
The retainer: what you pay while the process runs
A retainer is a fixed monthly fee, usually $10,000 to $40,000, paid from the point you engage the advisor until the deal completes or the mandate ends. It funds the unglamorous but essential early work: building the information memorandum, preparing the financial model, assembling the buyer list and running the outreach. Two things to check before you sign. First, is the retainer credited against the success fee at completion, so you are not paying twice for the same result? Many advisors credit some or all of it. Second, is there a minimum term? A six month minimum on a business that sells in four still costs you six months of retainer.
Why the retainer is an investment, not a cost
It is tempting to treat the retainer as a cost to minimise, or to favour an advisor who charges nothing up front and takes their fee only on success. That instinct usually works against you. The retainer is what funds the deep preparation that decides how well your business sells, and often whether it sells at all.
Good preparation is far more than assembling documents. Before your business goes anywhere near a buyer, a strong advisor runs a form of vendor due diligence: they examine your business the way an acquirer's advisors will, find the issues a buyer would use to chip the price or walk away, and fix or explain them ahead of time. Customer concentration, messy financials, key-person dependency, unclear contracts, tax or compliance loose ends: every one of these is a discount waiting to happen if a buyer uncovers it in their own due diligence. Surfaced and addressed before you go to market, they stop being leverage for the other side.
That work has value whether or not the sale completes. Cleaner financials, documented processes, resolved risks and a proper data room leave you with a stronger, better-understood business. If a deal does not proceed, you keep all of it, and you are in a far better position the next time you go to market.
There is also a reason retainers exist at all, and it is worth understanding from the advisor's side. A full sale process is six to twelve months of intensive work. Plenty of deals fall over for reasons that have nothing to do with how well the advisor performs: an owner has a change of heart, or cannot accept what the market is telling them about price. No quality advisor can afford to commit half a year or more of their team's time on a pure contingency, exposed to risks outside their control. The retainer shares that risk fairly. It is also the signal that both sides are serious, which is part of what lets a good advisor take your mandate on in the first place.
The alternative tells you something. An advisor who charges no retainer has little choice but to do little preparation, because unpaid deep work does not scale. They list the business, market it lightly, and hope. That materially lowers both your probability of selling and the price you achieve. You are not saving money, you are quietly accepting a worse result.
The better way to think about it is as an investment in the outcome. When you are selling a business worth millions, a retainer of, say, $20,000 a month is a small fraction of what is at stake. A well-prepared business, presented properly to the right buyers with genuine competitive tension, transacts more often and at a higher price. The gap between a sharp, well-run sale and an unprepared one is routinely measured in millions, and in whole turns of the EBITDA multiple. Against a swing that size, the retainer is minor.
That is the logic a good advisor works to. Because most of their money still comes from the success fee, they are strongly motivated to sell your business, and to sell it well. But they cannot do the work that lifts the price for nothing. Paying for that deep, up-front preparation is not an extra cost sitting on top of the success fee. It is the very thing that makes the success fee worth paying, and it is what tilts the odds in your favour. The retainer buys preparation, preparation buys probability and price, and the right advisor moves the number by far more than they ever charge you.
The success fee: paying for the result
The success fee is the main event. In Australia it typically runs 2% to 5% of the total transaction value, paid on completion. It can vary a lot at the lower end, dependent on whether it is a single advisor operator or a decent size boutique firm, amongst other factors. On a $20M sale, that is $400,000 to $800,000. The percentage is not arbitrary. It reflects deal size — smaller deals carry higher percentages because the work does not shrink in proportion to the price — sector, and size of advisor firm. A well run process that brings several buyers to the table is what earns the fee back, and then some.
The Lehman formula, explained
Some advisors price the success fee using a Lehman formula, a sliding scale that charges a higher percentage on the first slice of value and less on each slice above it. The classic version looks like this:
| Portion of transaction value | Fee on that portion |
|---|---|
| First $1M | 5% |
| Second $1M | 4% |
| Third $1M | 3% |
| Fourth $1M | 2% |
| $5M and above | 1% |
A double Lehman doubles each of those percentages. In practice, many Australian mid-market advisors have moved away from the classic scale toward a flat success fee or a modified tiered structure, because the classic Lehman was designed for much larger deals and undercharges on the sub-$25M transactions most owners are actually running.
Break fees, exclusivity and the tail
Beyond the retainer and success fee, three terms in an engagement letter are worth reading closely. A break fee (sometimes called a work fee or abort fee) is a charge that can apply if you walk away from a deal for reasons within your control, or if you terminate the mandate early. Not every advisor charges one, but you want to know before you sign. Exclusivity means the advisor is your sole mandate for the term of the engagement. That is normal and usually sensible, since a single advisor running a coordinated process protects confidentiality far better than several running in parallel, and aligns motivations and responsibilities. The tail is a period after the engagement ends, often 12 to 24 months, during which the success fee still applies if you sell to a buyer the advisor introduced. This stops an owner from ending the mandate late in a process purely to avoid the fee. Fair in principle, but check the length and that it is limited to introduced buyers only.
What a $20M sale actually costs
Putting it together for a $20M transaction:
- Retainer: say $20,000 per month across a nine month process, so roughly $180,000, often partly credited against the success fee.
- Success fee: 2% to 4% of $20M, so $400,000 to $800,000.
- Total advisory cost: broadly $580,000 to $880,000, depending on whether the retainer is credited and where the success fee lands.
That is a significant sum. It is also, on a well run process, a fraction of the additional value a competitive sale can unlock compared with a single-buyer negotiation, or an unprepared business.
How to compare advisors on fees
Do not shop on headline percentage alone. Ask each advisor: is the retainer credited against the success fee, what triggers a break fee, how long is the tail, and what have you actually achieved on deals my size in my sector. Fee structure and track record together tell you far more than the number on the front page.
The M&A Concierge alternative: a uniform referral rate
M&A Concierge does not sit inside this fee structure the way an advisor does. We match business owners with the right advisor for their business, and our referral rate is paid by the advisor, not by you. It is a uniform rate, which removes the incentive to steer you toward whoever charges the most. You pay your chosen advisor their fees in the normal way. What you get from M&A Concierge is an unconflicted match, drawn from advisors across 100+ sectors, with the fee coming out of the advisor's side of the table rather than yours.
Most charge a monthly retainer of $10,000 to $40,000 during the sale, plus a success fee of 2% to 5% of the transaction value on completion. For a $20M business, total fees usually fall between $400,000 and $800,000, depending on whether the retainer is credited against the success fee.
Through a combination of a retainer paid monthly while the process runs, and a success fee paid as a percentage of the final sale price at completion. The retainer funds the preparation and marketing work; the success fee rewards the result.
A sliding success-fee scale that charges more on the first portion of value and less on each portion above it. The classic version is 5% on the first $1M, then 4%, 3%, 2%, and 1% on everything above $5M. Many Australian mid-market advisors now use a flat or modified structure instead.
You will have paid the retainer for the months the process ran, and that is usually not refundable. Some advisors also charge a break fee if you end the mandate after a certain milestone. The success fee is only paid if and when the sale completes.
No. M&A Concierge's referral rate is paid by the advisor, not by you, and it is a uniform rate regardless of which advisor is recommended.