Robert Oddy, of SiFA, has been working on the group’s submissions to MBIE on the possibility of exemptions from the DIMS regime and to the FMA on its regulatory reporting requirements.

He said, given the direction that had been taken so far, it would be surprising if exemptions were allowed for DIMS providers.

The development of the rules seemed to have been driven by big banks and fund managers protecting their patch, he said. “They’ve done a better job of lobbying than the advisory community… If the government’s intention is to remove independent financial advice from the marketplace they should stand up and say so.”

The DIMS rules in their current form would require a hugely expensive remodelling of businesses, he said.

Advisers would have to decide whether they wanted to offer an “expanded budgeting service”, through limited financial planning, or go down the DIMS route with the expenses that would incur.

Oddy said regulation seemed to be one hit after the other and many advisers’ mental health was suffering. “Advisers are feeling higher levels of stress than at any time in the past, even during the global financial crisis and the Asian crisis before that. It’s a continuing tsunami of regulation although tsunamis at least have an end, this one keeps flowing.”

The Financial Advisers Act had prompted many to overhaul their businesses, and AML was also causing problems – as well as putting more requirements on consumers. “Some might opt out of advice and return to property investment because it’s much easier. The excessive levels of regulation far exceed the desired outcomes.”

Many advisers felt they were the politically expendable whipping boys of politicians who had to be seen to be doing something, he said.

“If we could get the roundabout to stop for a bit we could get back on our feet and develop practices to cope… that would be very gratefully received. We need a break from the onslaught and time to catch up.”