A predicted exodus of financial advisers from the industry following the Future of Financial Advice (FOFA) reforms has failed to materialise, according to financial services business brokers Connect CEO Paul Tynan.

Instead, uncertainty around parts of the legislation has prompted principals to postpone their exit plans until they see how the changes pan out, he says.

Meanwhile, buyers are exercising care when choosing practices and looking for value in deals.

“One of the main stumbling blocks [to sales] is the concern about a post-FOFA market,” Mr Tynan said.

“This is reflected in numerous transactions being placed on hold until the Australian Securities and Investments Commission sorts out the legal restrictions, especially the loss of grandfathering if the practice is transferred.”

Mr Tynan’s consultancy currently has more buyers than sellers on its books, but he predicts a number of Baby Boomer advisers will want to retire once the uncertainty has passed.

“The Australian financial services sector is about to encounter a huge transition of business ownership. Stakeholders will need to explore and implement new and innovative strategies to accommodate the transfer of these businesses to the next generation.”