The FSA yesterday warned it will take a "dim view" on any adviser firm seeking to build trail business in a bid to "get around" its adviser charging proposals.
Sheila Nicoll, FSA director of conduct policy, told delegates at the annual Tax Incentivised Savings Association (TISA) conference all sales must still meet the regulator's rules on suitability.
Earlier this year the FSA, in response to concerns from advisers about retrospectively applying adviser charging to legacy business, confirmed any pre-existing trail commission "can continue as before", adding "we will not require advisers firms to revisit business conducted before the  deadline".
But Nicoll warned: "We have heard there are some firms who might be thinking of taking the opportunity of the period between now and implementation to build up business with trail commission to, in a sense, get around our proposals and to suggest products in which they receive high remuneration which is not be right for the customer.
"I would just say that those sales still must meet our rules on suitability. We will take a dim view of such detrimental behaviour."
Nicoll also said the regulator remains committed to RDR and said legal challenges to its proposal to raise the minimum qualification standards were futile.
"A word of caution to advisers who think they might successfully challenge our ability to raise qualification levels - we have taken very clear legal advice on this and our proposals are legal," she said.
"The FSA can remove individual licenses to trade if an adviser is deemed incompetent."
Nicoll went on to say she understands the "apprehension" over taking exams and pledged the regulator would continue to listen to other proposals for assessing advisers' capabilities.
She also revealed the FSA will publish a new RDR consultation paper next month, addressing professional standards and a potential 'read-across' to the protection market. This will be followed by a review in March 2010 which will look at charging and advice.
When asked if the 2012 timeline is still achievable, Nicoll said: "Yes - we remain committed to it and think it is practical."
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