The FSA says it is "disappointed" after finding approved persons' knowledge of its ethical code "was so low".
The regulator's Statements of Principle and Code of Practice for Approved Persons (APER) sets out individuals' expected ethical behaviour in seven statements.
In June, it proposed adding additional descriptions of behaviour, including 'paying due regard to the interests of a customer' to the statements.
In a policy statement on competence and ethics published today, it confirms it will add the statements, but says it was surprised by the industry's poor knowledge of APER.
"We are disappointed to note, through informal discussions with various industry stakeholders and implied through some responses to the CP, that knowledge of APER among approved persons is so low.
"We point out that that adherence to APER is a vital part of retaining approved persons status.
"We expect approved persons to understand their obligations under APER and the consequences if they fail to adhere to them."
The FSA is imposing an ethical code specifically aimed at retail investment advisers as part of its RDR programme.
But it said all approved persons must adhere to ethical guidelines and has conducted a review of APER, which applies to all approved persons.
The first four APER statements apply to all approved persons. They are:
• statement of principle 1 - act with integrity;
• statement of principle 2 - act with due skill, care and diligence;
• statement of principle 3 - observe proper standards of market conduct; and
• statement of principle 4 - deal with the FSA and with other regulators in an open and cooperative way and disclose appropriately any information of which the FSA would reasonably expect notice.
In June it proposed adding additional descriptions of behaviour to those already set out under principles 1 and 2, namely:
• "paying due regard to the interests of a customer"; and
• "deliberate acts, omissions or business practices that could be reasonably expected to cause consumer detriment".
Pain thresholds key
To communicate equity release's wider opportunities and benefits, writes Chris Flowers, providers and advisers need to think about how best to engage not only its usual target audience but also their families
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