FSA warns firms over incentive-based remuneration

The Financial Services Authority (FSA) has warned adviser businesses they risk mis-selling to consumers, even with the abolition of commission, if they remunerate their staff based on the revenues they earn.

In a guidance consultation issued this morning, the regulator has set out how its successor, the Financial Conduct Authority (FCA), will seek to minimise the risks to customers from financial incentives. The proposed guidance tells firms they need to properly consider the risks of mis-selling as a result of their own schemes, review whether their governance and controls are adequate, and make changes to address any inadequacies. "This guidance applies to all firms in retail financial services with staff who are part of an incentive scheme and deal directly with retail customer transac...