The firm’s Adviser Confidence Barometer showed confidence fell from 5.6 out of 10 at the end of Q2 to 5.1 in Q3.

Almost half of advisers believe the biggest threat to the UK economy is European debt, with US debt being the second biggest threat.

Regarding interest rates, over half of advisers believe interest rates will continue to stay at 0.5 per cent. Interest rates have stood at 0.5 per cent since March 2009.

In Q2, only 14 per cent of advisers believed interest rates would remain at 0.5 per cent.

Peter Mann, chief executive at Skandia, said: “The summer months are usually a quiet time in the financial sector, but this year I know many advisers were busy watching the markets and answering calls from concerned investors.

“Although confidence in the UK economy is down, it is reassuring to see that advisers still recognise the potential in UK equities and popularity in this sector has risen quarter upon quarter.”

UK equities were voted as offering the third-best potential for investment returns behind emerging markets in first place and the global specialist sector in second place.