The Financial Conduct Authority (FCA) found conflicts of interest in half of the firms it reviewed as part of a report into inducements between advisers and providers.

The results of the FCA’s review highlighted “serious concerns” and a “poor management culture” in some firms whose actions have the effect of undermining the objectives of the Retail Distribution Review (RDR), the regulator said.

Under the rules, which came into force in January, commission-based selling from financial services product providers was banned.

The FCA wrote to a sample of life insurers and advisory firms setting out its concern that some firms may be trying to undermine the RDR rules.

In particular, the FCA was concerned that firms may be soliciting or providing payments, or other benefits, that did not look like traditional commission, but were intended to achieve the same outcome, i.e. to secure distribution.

Just over half the firms the FCA sampled had agreements that the FCA considered could be inducements rules and so undermine the objectives of the RDR.

The FCA said this may mean that the customer benefits of the RDR are not being fully realised in some firms as advice to customers may be inappropriately influenced by the existence of such agreements.

Two firms have been referred to enforcement for potential rule breaches.

Other agreements have been changed as a result to address the FCA’s concerns.

FCA director of supervision Clive Adamson said: “The changes we made to the retail investment advice sector were designed to mark a step change in the way advice was given.

“It signalled the end of advice that might be influenced by the commission payments made by product providers to advisory firms, and the start of a new era of trust and transparency between a firm and its customers.

“The findings of this review reveal that the actions of some firms have the effect of undermining the objectives of the RDR.

“Most the firms involved in the review have already made changes, which are welcome, but we want all firms in this market to review and, if necessary revise their existing arrangements.

“We will revisit this area in the future to check that the necessary improvements have been made.”