Older advisers who want to sell their life books can once again do so under a welcome move to reinstate grandfathering rules, Synchron Director Don Trapnell says.

“Grandfathering means a senior adviser will be able to sell their book to another adviser and retire,” he told insuranceNEWS.com.au.

“Previously, they would have to keep their book, do the minimum amount of training and keep receiving commission. How was that going to benefit the consumer?”

Mr Trapnell says the changes will allow specialist life advisers in investment-focused dealer groups to move rather than be stuck, as they would have been under original Future of Financial Advice (FOFA) rules.

“Common sense has prevailed,” he said.

Association of Financial Advisers CEO Brad Fox says the agreement on grandfathering recognises the relationships between most advisers and their clients.

It also protects clients’ right to choose their advisers.

“Smaller licensees will be able to grow their adviser numbers, new licensees will be able to launch and larger licensees will need to continue to compete to retain their existing advisers,” he said. “Good judgement has prevailed and market competition is ensured through this pragmatic solution.”

Financial Planning Association (FPA) CEO Mark Rantall agrees the move is “particularly important”.

“It is understood this will also include the sale and purchase of advice businesses, something the FPA has and will continue to advocate for, in the drafting of the regulations,” he said.

“Grandfathering plays an important role in maintaining competition and its reintroduction is welcomed by the FPA.”

Financial Services Council Director of Policy Andrew Bragg says the agreed change to FOFA will “provide certainty and stability for small businesses in the financial advice industry”.

“It means small financial advice practices will not lose value when businesses are sold,” he said. “It will also assist sustainability for advice businesses while they transition to new business models.”

Two of the financial advice industry’s loudest critics – Industry Super Australia and consumer group Choice – have been notably quiet on the changes.