The number of financial services firms going into administration rose by 50 per cent last year.
IFAs were among the worst hit, according to business consultancy firm Deloitte.
It says the increased regulatory burden and higher admin costs were the main cause, along with increased levels of direct internet and bank sales taking business away from advisers.
Deloitte says the Midlands was the worst-hit region, with a 60 per cent increase in firms going into administration. Only the North-east saw a reduction by 2 per cent.
Reorganisation services partner Lee Manning says: “The increase in failures in financial services could also be a sign of gradual shift away from the typical high-street IFA in favour of big providers, such as banks, and internet buying. Increased compliance costs are a theme which have affected recruitment businesses as well.
“The last year has seen a number of regulatory changes creating an additional audit burden, which may have pushed a number of smaller operators over the edge.”