When thousands of planners all head for the door, will you be caught in the stampede? Right now there is still time to act, but probably not time to wait.
From 1st January 2026 existing financial advisers need to have completed an approved or relevant degree and/or an approved graduate diploma or bridging course.
For many planners already stressed by years of increased compliance requirements the need to attain an “approved” or “relevant” degree in order to continue the job you had been doing successfully for years is seen as a bridge too far.
According to data from Adviser Ratings it is expected that 3800 of advisers over 55 do not intend to do their degree and therefore will need to go by 1st January 2026.
They predict a total of 4600 “intentional” adviser exits which, when combined with what AR terms “Organic Adviser Exits” adds up to 6800 practitioners leaving before 1st January 2026.
During the same period the are predicting that for each person entering the profession there will be seven people exiting, cutting adviser numbers by almost 1/3 in the period.
So, what does this mean for those looking to maximise the sale price of their financial planning business? Well, that depends.
It depends on the timing of your sale and how this is balanced against demand at the time you choose to sell. Demand for your practice can be affected by such factors as:
- Buyer access to a qualified labour force to undertake the work
- The appetite of banks to lend to the industry
- Banks preferring to lend to members of “accredited” licensees
- Whether buyers have already had their fill of acquisitions
- Client transition constraints, especially in the era of Covid
- How many buyers exist as part of the buyer pool
- How many other competing practices are on the market at the same time.
In addition to the other factors it has been predicted that there will be a reduction in the pool of buyers by 1/3. So it will certainly be interesting to see how prices track over the next 4 years.
If you are looking to sell there is one piece of good news: due to lockdowns there are relatively few practices on the market right now.
If you are thinking of selling in 2022 feel free to get in touch and we can talk about your options.
