The FCA’s planned total ban of anything it considers a perk given to an adviser by a provider to induce them to sell their products is concerning, according to the Chartered Institute for Securities and Investment.

The CISI has said the regulator’s plans on financial guidance, could ultimately hurt consumers.

In August the FCA proposed changing the definition of advice so it will only include personal recommendations, meaning guidance will cease to be a regulated activity for the majority of authorised firms. The FCA has said it intends to ban inducements.

The CISI said: "Whilst extravagant hospitality gifts and monetary inducements are clearly unacceptable, the banning of inducements outright is likely to have unintended consequences.

"If firms feel as though they cannot take a client, competitor or supplier out for lunch, or accept a space at a conference, for example, then opportunities for people to understand each other will be missed.

"These activities offer the possibility of collaboration, communication and development, which ultimately benefit the end user, and an outright ban may prove to ultimately disadvantage consumers."

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