In Q4 2009, just nine mortgage broker firms applied to be authorised, a drop from 20 in Q3 and 22 in Q2.
New independent financial adviser (IFA) authorisations fell 35% from 81 in Q1 2009 to 53 in Q4 2009.
Overall, quarterly authorisations have experienced three years of consecutive declines with the exception of marginal increases in Q1 2008 and Q2 2009.
Cancellations accelerated from 150 in 2007 to 1500 last year, while new joiners fell from around 20,000 in 2007 to 13,000 over the same period.
A JP Morgan Asset Management poll backed up the report, stating that one in seven IFAs are planning to leave the industry as a result of the Retail Distribution Review implementation in 2012.
Olly Laughton-Scott, managing partner at IMAS Corporate Advisors, said that the industry needed to tackle the reasons for the unpopularity of the adviser profession.
He added: “We believe that industry numbers are stabilising at a low level. It will continue to be small for years to come, as firms leave the industry and are not replaced.”
Jock Cassidy, director at Ashley Law, said consumers would ultimately lose out due to a reduction in choice and competition between advisers.
He added: “Adviser firms have not been protected in the same way that banks have, and this has meant that some have lost their jobs. It all means that guidance in the future will come from a smaller pool of brokers.”
Robert Sinclair, director at the Association of Mortgage Intermediaries, agreed that the FSA has made it difficult for advisers to remain in the industry.
He explained: “As the FSA drives up standards, brokers may be pushed towards retirement or resignation rather than qualify by 2012. The regulator is also making advice more expensive, meaning fewer consumers will pay for it, which is a concern for brokers entering the industry.”
