Fewer financial planners are prepared to advise their clients on margin lending, and, among those that do, a significant proportion believe regulatory changes have made it a less attractive option.Research published by Investment Trends yesterday suggests that one reason the margin lending market has failed to recover over the past year, despite buoyant equity market conditions, is that financial planners are reluctant to recommend the product.There was a pick-up in margin lending activity in the March quarter last year, which was the first increase in loan balances since 2007. But Reserve Bank figures show that balances fell again in the June and September quarters.According to Investment Trends, the proportion of planners advising on margin lending fell from 55 per cent in 2012 to 45 per cent in 2013.One-third of planners who still advise on margin lending say recent regulatory changes make recommending the product unattractive. Since January 2011, lenders and their representatives selling margin loans have had to comply with the responsible lending provisions of the National Consumer Credit Protection Act.Another regulatory change that has had a negative impact on the market is that, under Future of Financial Advice reforms, planners cannot include any geared component of a client's portfolio in the calculation of their asset-based fees.An Investment Trends analyst, SM Shahed, said: "A push from planners could certainly help grow the margin lending market."Shahed said self-directed investors increased their use of margin lending in 2013, while outstanding debt originated through the financial planner channel fell 13 per cent last year.