The industry is on the home stretch towards the new legislative regime coming into force. All advisers will soon have competence requirements to meet, probably including the need for a level five certificate, ongoing CPD, and licensing of their businesses by the FMA.

Trevor Slater, client director of external dispute resolution service FairWay, said he did not expect any more advisers to exit the industry this time than when regulation was first introduced.

But he said some who were nearing retirement age might choose to jump now rather than go through the process of entity licensing.

The industry has an average age close 60.

“If they are close to retirement it could be the last straw. What does concern me is with a potential number of books on the market that could devalue what they are worth. But we don’t know yet what licensing is going to look like and how that would affect small or medium operators.”

Russell Hutchinson, of Chatswood Consulting, said it had been predicted several times in the past that large numbers of advisers would quit.

“You have to put yourself in the shoes of an adviser who is 65. They don’t cease to be an adviser and then try to sell the business. It’s the other way around. They try to sell and if they do they cease to be an adviser. That being the case they’ll do the stuff they need to do to stay in the business if they can’t sell.”

Some might decide it was worth taking a lower price for their business to avoid having to comply with the new regime while others would opt to stick it out for a higher sale price.

“There are number of things that indicate it will be less than an exodus,” Hutchinson said.

He said now that the competency standard looked set to settle at level five, not a degree as originally signalled, the hurdle to comply was lower.

“If you’re trying to sell a business worth $500,000 and you’re getting offers at $300,000, for the sake of $200,000 I’d take level five.”

Mike Moore, who specialises in marketing financial advisers' books of business, said he did not expect a large number to leave the industry. "I think it's a continuous drip, drip, drip. It might be accelerated but I on't expect to see a whole bunch."

Slater said a tidy-up of the industry was needed. “It’s been too easy to get into the industry. At times I’ve heard it’s harder to get a bank agency for mortgages than insurance.”

Industry competence standards were necessary to get the public to understand the value financial advisers could add, he said.

“I hope, and this is my fear, that we don’t end up with lots of big financial advice houses and lose the brilliance of the smaller independent operators that provide such good service.”

He said there was a “slim” chance that smaller operators would seek the safe haven of a big group.