In its consultation response, Pimfa added that until a "reasonable compromise" can be made between the need for consumer protection and the costs incurred by firms in funding it, the cost of advice will continue to be high relative to what it was previously.
The trade body noted that since the introduction of the RDR, the average cost for wealth management firms to cover compliance costs has risen by around 58 per cent, according to data collected in 2018 by Compeer.
Within the same timeframe, average revenue per firm remains lower than it was pre-RDR, whilst consolidated industry profit remains substantially lower, Pimfa stated.
In May Mr Bailey refuted claims the regulator does not want companies in the financial services sector to make a profit.
Speaking on the regulator's inaugural "Inside FCA" podcast Mr Bailey said the sector needed firms that "earn returns" but he added commercial success must be achieved in line with the FCA's public interest objectives.
Following the publication of its call for input the regulator stated it was open to changing its regulation if the results of its advice market review showed current rules were hampering innovation or failing to deliver the best consumer outcomes.
Nisha Arora, director of consumer and retail policy at the FCA, at the time said: "We are looking at if regulation is actually facilitating the right advice for consumers, or is actually skewing, steering, or hampering innovation in any particular way.
"The call for input acknowledges regulation should be a force for good, protecting consumers and facilitating a competitive environment in the market - but at times it can get in the way and not deliver the right outcomes, and we’re open to looking at that in the review."
Ricky Chan, director and chartered financial planner at IFS Wealth & Pensions, agreed with the criticism made by Pimfa.
He said: "The FCA have got to take some responsibility for the rise in levies paid by firms and scandals such as LCF.
"Regarding the rise in levies, much of this relates to unregulated investments (typically via self invested personal pensions) and it’s my belief that these should not be made available to retail investors – a ban was ruled out by the FCA previously, so clearly this was a poor decision.
"Related to this are general costs for compliance and professional indemnity insurance, and over the years, most firms have seen this rise, leaving many less affluent clients underserved. This cannot be sustainable and surely was not the intention of RDR."
