In order to attract buyers, advisors hoping to sell their firms before 2012 will need to make sure that their business is compliant with the Retail Distribution Review, says 1st Exchange, the financial services technology firm.

The firm expects a mass sell-off of independent financial advisor firms to take place over the next year and a half. It said that more than 25 per cent of the 28,700 advisors registered with the Financial Services Authority, the UK financial regulator, are expected to have left the industry by 2012, when the RDR changes are implemented.

"Many IFAs have signalled their intention to leave the industry instead of meeting the RDR proposals, which will lead to a wave of IFA firms being put up for sale," said Paul Yates, the propositions and business development director for 1st Exchange.

This will lead to an oversaturation of the market, the firm said. It added that, to avoid drowning in the flood of businesses for sale, advisors will need to offer clean and accurate data, as this will be a main differentiator in a flooded market.

It may also become a statutory requirement to submit all transactional activity to the FSA under new plans to increase the scrutiny of individual advisers.

"Obviously, the more RDR compliant, or potentially RDR compliant a business is, the more attractive your firm is to potential buyers. We think that the cleansing and correct management of data is an extremely worthwhile and cost-effective step towards making your company RDR ready; translating into higher financial gains should you choose to sell," said Yates.