Four in five financial advice firms reported increased turnover in 2024, with two thirds anticipating higher profits in 2025, according to a new report.

Advice firm owners were the most positive they have been since 2021, according to the Lang Cat consultancy's seventh annual State of the Advice Nation report.

While most firms reported a successful year, the report found 'energy levels' across the 500 advisers surveyed were low.

When asked what is keeping business owners awake at night, fears of further regulation continued to be the most dominant theme for a third (31%) of respondents.

There was a general consensus that there is too much regulation and it is becoming too hard to keep on regulatory track.

Advisers had a mixed view of the FCA’s Consumer Duty. Over 20% rated progress overall as a ‘waste of time’. This jumped to over 40% for the Customer Support outcome, where firms should monitor if customers feel they are getting the support they need.

The second major concern shared by advice firm owners was staffing and finding the right people to join their businesses (15%).

For firms more broadly, 29% said provider inefficiencies presented the biggest challenge to their work. Many respondents emphasised the need for meaningful provider support on key issues like pension transfers and Letters of Authority.

The number of advisers looking to sell their business rose. Some 15% of owners said they expected to sell to a consolidator within the next five years. This figure jumped to over one in four for those nearing retirement, up from just over one in five in 2024.

Steven Nelson, insights director at the Lang Cat, said: “While the industry outlook is positive, the growing burden of regulation is clearly taking its toll, as well as managing the day-to-day demands of running a successful and profitable business. But firms are open to regulation having a meaningful impact in the right areas, with the majority looking for a more proportionate approach that they believe could positively affect client service or fee levels.”

The report also asked advisers new to the profession what attracted them to financial advice. The main driving force behind their career choice was the opportunity to help people (41%), followed by an interest in the subject itself (31%) and for the clear career path available (31%).

However, when asked about any unpleasant surprises since starting work, nearly two thirds (62%) quoted the regulation and bureaucracy to contend with and the amount of paperwork still used (65%).

• The lang cat surveyed over 500 financial advisers in January.