A spokeswoman for Aviva said: “The FCA has issued guidance on its position on hospitality for distributors.
“Following this new clarification we have decided not to host hospitality events for our life distributors.
“This is to ensure that both Aviva and our distributors adhere to the FCA’s ruling on this matter.”
The life distributors affected include its protection, savings and investment products.
Zurich has also confirmed it is reviewing its existing arrangements and is engaged in discussions with distribution partners.
It said: “Any new approach will be formulated after a careful examination of the FCA recommendations and in the context of our own internal policies and procedures.”
The objective of the final rules is to stop providers offering monetary and non-monetary benefits to secure distribution with adviser firms and adviser firms seeking rewards for entering into agreements with providers which do not enhance the quality of service provided to the client.
And while the paper focuses on the retail investment industry, following the consultation period, members of the mortgage and protection industry approached the FCA to obtain clarification on how they would be affected.
In its guidance, the FCA responded by saying: “Some respondents to the guidance consultation pointed out to us that our guidance does not apply to mortgage or protection business.
“Payments provided in relation to mortgage and protection business are still subject to the Principles for Businesses, including Principle 8 (Conflicts of interest), and so similar considerations apply to such payments as outlined in this guidance.
“We expect firms to act responsibly and not attempt to circumvent this guidance by soliciting and making excessive payments for other product lines.”
Principle 8 requires that a firm must manage conflicts of interest fairly both between itself and its customers and between one customer and another client.
Key areas covered by the rules are;
Hospitality and gifts – page 12, 2.35 – 2.39
Providers and firms must be able to prove hospitality is of a “reasonable value”. The FCA does not consider foreign trips and inviting top advisers based on their volume of sales to hospitality events as reasonable value.
Training – page 10 2.27 – 2.29
Advisers based in the UK are expected to be trained in the UK and it must lead to a direct benefit to the customer.
Overnight stays should only be paid for where travelling to the event on the day was impractical for the adviser.
Promotional activity page 13 2.40 – 2.45
Providers can only pay the market rate for placing articles, news and promotions in advisers’ magazines. A market rate is considered to be what a trade publication would charge for the same placement.
Aviva said it was currently reviewing the boundaries for hospitality events.
The spokeswoman said: “The guidance says that any hospitality should be reasonable and we are currently looked at how this is best defined, and there must be a clear customer benefit.”
Robert Sinclair, chief executive of the Association of Mortgage Intermediaries, said AMI is reviewing the rules and the implications for the mortgage industry.
He said: “This point is key about firms being transparent with what they are offering and the value of that and firms being clear about why they are accepting that benefit.
“This should not influence decisions about the products being offered to consumers as this is the driving force behind mis-selling.”
Firms have three months to review their existing agreements in light of the rules, from 16 January when they were first published, to avoid any action from the regulator.