Adviser sentiment has hit a two-year low, along with incomes, according to new research for Zurich Financial Services Australia.

The December index from Beaton Research and Consulting shows plunging adviser confidence across all measures, along with a more negative assessment of the regulatory environment.

Advisers were less optimistic about the long-term viability of practices and the short-term sales outlooks.

Zurich Life & Investments GM Retail Philip Kewin says the results are unsurprising in light of last year’s Australian Securities and Investments Commission (ASIC) and Financial System Inquiry reports.

“Advisers found [last year] very challenging from a reputational perspective, especially in the wake of the ASIC report and the negative tone of the subsequent dialogue,” he said.

“Our research shows this hasn’t just affected adviser mood, it has also flowed through to bottom lines. Nearly one-third of advisers indicated the negative publicity had led to a drop in revenues for their businesses.”

One in 10 advisers say revenues have dropped by 10% or more, the survey shows.

“This is purely as a result of the reputational damage the advice profession endured last year,” Mr Kewin said.

“The events of the last year have driven a wedge between consumers and advisers.”

He says rebuilding trust in the industry will not be achieved by changing remuneration alone. It will require an improvement in the overall customer experience.