In its latest quarterly consultation paper, it said advisers must provide the customer with an ongoing service in return for the trail, regardless of whether the contract allowed for this as a condition of transfer.
The FSA has also clarified to Mortgage Solutions sister publication IFAonline that advisers can then add a supplementary adviser charge if they feel the legacy trail does not sufficiently cover the ongoing service they will be providing to their new client.
Firms will have to tell the client they have applied for the transfer of trail and how much they are due to receive.
In its March policy statement on adviser charging, the regulator suggested the transfer of trail should not be permitted where a customer changes adviser after 2012, but the FSA has backtracked following concerns expressed by industry.
It said under those circumstances, legacy trail should instead be passed on to the client, but it today proposed a different stance.
Additionally, advisers will not be compelled to re-register trail commission if they prefer not to do so.
In today’s paper, the FSA said it considered prohibiting the re-registration of trail commission after 2013, but said this would have led to the new adviser charging extra for services the trail might otherwise have covered.