The banning of marketing "packages" between providers and advisory groups would bankrupt most networks and support service providers, Threesixty managing director Phil Young said.
Last week, the Financial Services Authority (FSA) contacted the CEOs of 24 providers and IFA firms to warn them against "distribution agreements" which could be perceived as attempts to "work around" the Retail Distribution Review (RDR) commission ban.
Examples of agreements the regulator said it found concerning included providers "organising, subsidising or paying for distributor training, conferences or seminars", as well as payments to a distributor to help promote a suppliers products.
Young said a number of networks generated more than half of their revenues from such arrangements - and would "shut up shop" immediately if the regulator took further action.
"I can't see [the FSA] banning marketing packages, because for a lot of businesses it's a big chunk of their revenue. That's something that's concerning.
"The fact the regulator has sent out a ‘Dear CEO' letter and there has not been any visible action taken suggests they think something untoward is going on but they are unable to prove it.
"It's a shot across the bows but without any real clarity."
The FSA's head of life insurance, Nick Poyntz-Wright, told IFAonline the FSA had not named firms because they had not necessarily "done anything wrong".
Young argued marketing payments - which can total millions of pounds for a place on a large network's restricted panel - were smaller than in previous years.
"There's much less money sloshing around," he said.
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