'Old and bold' planners could refuse to sell
Some older planners are refusing to sell and instead choosing to live off their commissions income indefinitely, according to Kenyon Partners chief executive Paul Tynan.
Preparing for the sale of a business through a succession plan is an expensive business, and some planners in their 60s are simply deciding it is too hard, said Tynan.
"They're not worried about getting it ready for a sale. They're just going to sit in the business and just get the income every year, and basically die in the business," he said.
Many planners in their 60s are enjoying their lifestyle provided by their current income, and they are concerned about their retirement funding, Tynan said. In addition, they lack the skills to earn a similar income outside their business, he said.
Tynan cited a recent example of a 63-year-old planner who entered into an agreement to sell to a younger planner. The younger planner had bought 50 per cent of the business and was set to take over the entire practice in three years' time, said Tynan.
"Now [the older planner] is 66 and he's saying 'I'm not retiring. I'll just sit back and take the income. I'm not selling.' He's most likely looked at his lifestyle, and is concerned that the sharemarket still hasn't come back to 2007 levels," said Tynan.
The younger planner was left in an awkward position, said Tynan. Rather than having both planners "spend $50,000 on lawyers", the younger planner is now looking at selling his half of the business and then returning to the market, he said.
While Tynan doesn't expect a lot of older planners to refuse to sell, he said some "old and bolds" might look at it.
"They actually like getting up, getting in the car and going to work. They enjoy the face-to-face part. They mightn't enjoy doing a [Statement of Advice] and all the compliance. But they enjoy the clients and they make a good living out of it," he said.
Recommended for you
The shift in scale and consolidation has led to substantial growth in large privately owned licensees, which have tipped past 20 per cent of advisers for the first time to make up 28.3 per cent of the industry.
ETF providers Betashares and BlackRock are reporting increased flows for currency hedged vehicles, but an adviser has warned on the potential tax implications of changing currency.
Bravura chair Matthew Quinn is to step down later this year, following the exit of CEO Andrew Russell, while its future priority is digital advice in Australia.
Financial advice has an important role to play in navigating family discussions around inheritance, according to CFS, with younger generations expecting a windfall of more than $500,000 while older ones try to meet their retirement needs.
