Buyers of planning practices getting fussier

Buyers looking to acquire financial planning businesses are becoming fussier and seeking greater value, according to Melbourne-based financial planning business broker Paul Tynan.

Tynan, the chief executive of Connect Financial Services Brokers, has joined others in the sector in lamenting the fact that continuing uncertainty around the final shape of the Future of Financial Advice changes has placed many principals looking to sell a business in a holding pattern.

"One of the main stumbling blocks is the current state of the market as post-FOFA [Future of Financial Advice] concerns escalate and this is reflected in numerous transactions being placed on hold until ASIC [the Australian Securities and Investments Commission] sorts out the legal restrictions, in particular, the loss of grandfathering if a practice is transferred between different licensees," Tynan said.

He said he believed it was ironic that business owners who had worked diligently in providing succession advice, were now seeking to implement their own succession plans but finding themselves in an unprecedented period of uncertainty.

Tynan is among a number of financial services business brokers who believe that there will be a flurry of activity once much of the uncertainty around FOFA, but particularly with respect to grandfathering, is resolved.

With the Prime Minister-elect, Tony Abbott scheduled to announce his new cabinet on Monday, it is likely to be a number of weeks before the Federal Treasury is positioned to provide any clarity around the grandfathering issue.