Advisers have received a new warning from the regulator not to churn clients into new products to maximise recurring revenue in the run-up to the RDR.
In its retail conduct risk outlook published this week, the FSA says advice firms may look to increase the amount of trail commission on their books as a way of “cushioning” the RDR’s ban on commission.
It says advisers selling their businesses may try to build up income by selling significant amounts of commission-based products to make their firms more attractive to buyers.
The FSA says providers may also seek to acquire market share by offering big commission to advisers.
The FSA says: “We have heightened our supervisory vigilance in this area and will continue to intervene where we believe high commission levels may be contributing to poor outcomes for consumers.”
Clancy Financial Planning financial planner Jim Clancy says: “I am getting fed up with this kind of thing. The FSA makes us all look like crooks. The vast majority of advisers I know work with honesty and integrity.”