Harrison Spence predicted that within 12 months, one-third of the market will be restricted, up from around 15% today.

This will rise to a 50/50 split, the firm forecast, despite a survey it conducted suggesting a hardening of advisers’ stance against moving to a restricted model.

Very few IFAs intend to become restricted in the next few months, if ever, the research suggested, with just 1 in 50 (2%) IFAs saying they will become restricted in the next 12 months.

A further 16% were uncertain whether they will adopt restricted status.

More than two-thirds (67%) remain staunchly independent, stating they will never become restricted. The remainder (15%) were already restricted.

This compares to 1 in 5 IFAs (22%) who saw themselves becoming restricted during 2016, when a similar survey was conducted 12 months ago and the one third in total (35%) who thought they would be restricted in five years.

The company, whose staff have experience of running IFA practices, stated: “Harrison Spence’s view is that within 12 months, one-third of the market will be restricted, up from around 15% today and in the next three years, there will be a 50/50 split as the ‘uncertains’ go down the restricted route.”

Brian Spence, founding partner, Harrison Spence, who conducted the research, said: “It is likely that IFAs will come to realise that moving from independent to restricted status, for all or part of a business, is a way to potentially reduce costs and risks, and free up more time to spend with clients, without fundamentally changing the offering.”

The reason IFAs appear to have hardened their stance against restricted status over the last year could be that some of the larger deals in which firms have been bought by restricted acquirers, have either failed or had their shortcomings played out publicly, which may have created a deterrent. That was the view of Mr Spence.

He said: “There is a distinct hardening up of the ‘not at all’ camp who see a way forward in remaining independent. This has resulted in a firming up of their ideology and determination against restriction.

“While the reality is that it is more onerous to be independent, it is possible to boost profitability and reduce risk without going down the restricted route. Careful management of administration and bureaucracy and bringing investment in-house are two areas where successful independent firms focus.”