The market regulator said that despite the Retail Distribution Review (RDR) coming into effect in January 2013, some life insurance companies still had arrangements, which could influence advisers, while offering financial advice to consumers.
It found that at least two firms have breached RDR’s aim of removing commission bias in financial advice, and they have been referred to enforcement actions.
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The RDR clearly states that how much consumers pay for financial advice, what they pay for, and improved professional standards by introducing a minimum level of qualification for all investment advisers.
Together with the review, the market regulator has also published the proposed guidance, enabling firms to have better a understanding on how they should act.
Commenting on the findings, FCA supervision director Clive Adamson said that the changes signalled the end of advice that might be influenced by the commission payments made by product providers to advisory firms, and the start of a new era of trust and transparency between a firm and its customers.
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