The Financial Services Authority, which regulates the UK financial sector, intends to collect much more information from IFAs about complaints and charging, broken down to the level of individual advisors, as it attempts to police its new Retail Distribution Review regime.

In a consultation paper released yesterday, the FSA proposed changes to the Retail Mediation Activities Return and its collection of complaints data. The regulator proposes collecting a breakdown of advisor charging revenue by type of advice, type of service and payment mechanism, which it says will help identify both excessively high and low advisor charging.

Excessively high charging can indicate a breach of disclosure rules, hidden charges or a lack of competition, while low charging can indicate manipulation of costs allocated to product charges and advisor charges in firms that provide both products and advice, or that charges are being concealed from customers, according to the FSA.

The regulator also said that collecting data on complaints at an individual advisor level would allow it to trace unsuitable advice back to its source.

Under the new proposals, IFAs would provide the FSA with a complete twice-yearly report of complaints received. Firms would also have to report advisors who receive three complaints in any 12-month period, and all complaints involving a claim of more than £5,000 ($8,177).

If the proposals are agreed following an initial consultation period which lasts until 8 July, they will come into effect on 31 December 2012.