The FSA today said it will take action against those firms churning out trail commission ahead of RDR.
In today's TSC public evidence hearing, Conservative MP Mark Garnier asked FSA director of conduct policy Sheila Nicoll what the regulator is doing with regard to policing the churning of trail commission.
"This is one of the risks we have identified and are looking at in our supervisory activity," she said. "If we find firms flouting these rules by taking trail commission inappropriately we will take action."
She added smaller firms will be monitored through the examination of "trends" and return data.
Garnier also raised the point firms could find alternative ways of receiving commission - such as fees paid on behalf of product providers.
Meanwhile, chief executive Hector Sants said the FSA has "reasonably good evidence" investors are willing to pay fees but conceded there is a "risk" the lower end of the market may not be willing to pay.
However, he said the simplified advice regime will cater to this segment of the market.
Prior to today's hearing, MPs on the influential TSC waded through about 250 pages of evidence on the RDR - including many sent by IFAonline readers - since they put out the call for public submissions in December.
Conservative MP Mark Garnier had previously promised to give the FSA "hell" during today's public evidence hearing.
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Avoidance, evasion and non-compliance
From 6 April 2019