The Association of Professional Financial Advisers has criticised the Financial Advice Market Review as its figures showed a fall in the number of advice firms.
The latest figures published by Apfa showed the number of advice firms had gone down from 14,491 to 14,054 between 2015 and 2016.
Meanwhile the number of individual advisers has gone up slightly from 23,864 to 24,761.
But profits in the advice sector have continued to shrink.
In 2016 average profits before tax by firm was £145,716, down from £158,667 the year before.
This was itself a decrease on 2014, when average profit before tax was £178,557.
It marks a reversal of the trend taking place before the introduction of the Retail Distribution Review, when profits were going up year-on-year.
Chris Hannant, director general of Apfa, said: “It has now been four years since the dramatic changes to the market that followed the RDR and the number of advisers has remained steady, although still below pre-RDR levels.
“While turnover has increased in recent years, pre-tax profits have continued to fall to their lowest levels since 2010.
“It is in everyone’s interests to have a thriving and profitable advice market as only then will new firms be encouraged to enter the market and existing firms have the capacity to invest.
“Although we welcomed the aims of the Financial Advice Market Review, we believe that it missed the opportunity for the urgent and radical change that is necessary to reduce the unfair regulatory burden on advisers.
“The next government must use the 2019 Review of Famr to undertake deeper root-and-branch reform on the issues of the balance of the liabilities advisers face and the cost and complexity of regulation.”
The number of appointed representatives - advisers who are not the principal of their firm, many of whom will be in networks - still outnumbers their directly authorised counterparts but has been in decline for a number of years.
There were 8,608 appointed representatives firms in 2016 – a decrease of around 400 on the previous year – while there were 5,446 directly authorised firms – an increase of nearly 200 on 2015.
The overwhelming majority of advice in 2016 was independent at 80 per cent – unchanged on the previous year.
Restricted advice made up 16 per cent of the market, a slight decrease on 2015 accounted for by an increase in execution-only business and focused advice.
Dennis Hall, chief executive of Yellowtail Financial Planning, said: "Staff costs are going up for sure. There is a shortage of the right people and I think we are seeing inflation-busting pay rises for the right people so that is one aspect.
"There seems to be constant change all the time, both from the regulatory and from the Treasury. They could help by reviewing the things they ask us to do."
An FCA spokesperson said: “FAMR remains a key strategic priority for the FCA.
“A progress report was recently published which reported that implementation of each recommendation is either complete, or is on course for completion on schedule.