In the last 12 months alone, the average planner lost 35 active clients relationships, while gaining only 20 new relationships over the same period, the report said.

A shrinking client base has adversely impacted practice profitability growth, with fewer planners saying their practice experienced year-on-year growth in profits, the report said.

Around half of respondents or 53 per cent said their practice experienced year-on-year growth, which was down from the 59 per cent figure in 2017 and the 61 per cent figure in 2016.

Investment Trends research director Recep Peker said advisers continue to face challenges on multiple fronts, chiefly with compliance, client acquisition and building process efficiencies.

“Further, the recent Royal Commission inquiry has amplified planners’ concerns with heightened regulatory uncertainty and negative press, and this is proving to be a major impediment to their growth prospects,” he said.

The survey also indicated a greater move towards self-licensing, with one in five stating they have their own AFSL, double the proportion observed in 2012.

While self-licensed planners brought in a higher level of new inflows over the last 12 months, according to the survey, fewer report annual practice profit growth compared to their colleagues in the wider planning market, with the profit growth for self-licensed planners at 47 per cent versus 54 per cent for the wider market.

While planners believe the royal commission has dented the reputation of the financial planning industry, the survey indicated the majority or 66 per cent expect positive structural transformation to flow from FASEA-led reforms.

Only a quarter believe the new professional standards and education framework set out by FASEA will have a negative impact on the industry, the report said.

“Most financial planners accept that higher professional standards are vital for the financial planning industry to be truly recognised as a profession,” said Mr Peker.

“The younger generation of planners are, in fact, more positive towards these FASEA led reforms.”

Many planners expect that the implementation of FASEA standards will come at a cost, notably through the degree equivalence requirement and the demands of the one-off exam.

“There will be a burden on time and cost for planners as the degree equivalence requirements come into effect in 2024, and support from professional associations and licensees is needed to ensure a smooth transition,” said Mr Peker.