FSA to widen review of retail mis-selling The City watchdog's clampdown on retail sales incentives that led to mis-selling is expanding to include all the main high street banks and most large insurers and investment managers. A previous sweep of 22 UK financial companies of various types found that almost all of them had reward programmes that created a strong risk of mis-selling. The review led to the opening of a formal investigation of Lloyds Banking Group. The Financial Services Authority said on Wednesday it now plans to expand its review to look at bonus and commission schemes across a much wider swath of retail companies. The watchdog also handed down final guidance on how such schemes should be managed in the future. Companies have been warned to avoid schemes that encourage staff to sell particular products within a range of options. They should also make sure they reward employees for customer satisfaction and other measures of good outcomes rather than just for hitting numerical targets. The new guidance is part of a drive by Martin Wheatley, who heads the conduct side of the FSA and will be chief of the Financial Conduct Authority when the FSA splits up in April. The aim is to prevent a repeat of the payment protection insurance scandal, which has cost the big banks nearly £12bn in customer redress. If they have not done so already, firms need to look at this guidance now, work out how it applies to them and what they should do differently. We remain open-minded about whether or not new rules are needed to ensure consumers get a fair deal, but the answer to that question will ultimately come from the industry's response to this piece of work," Mr Wheatley said in a statement. The final guidance is largely similar to that put forward by the FSA in September, but makes clear that the requirements apply to companies that provide a service as well as those selling products. It includes new examples of poor reward schemes. Lloyds, Barclays, HSBC and Royal Bank of Scotland have already announced plans to revisit or revamp their incentive plans in light of the FSA's concerns. Anthony Browne, chief executive of the British Bankers" Association, said: "All of the high street banks have said that past mis-selling was clearly wrong, and have prioritised ensuring it becomes a thing of the past. Mis-selling is bad for customers, bad for confidence in the industry and bad for banks. There is no excuse for any practices that encourage mis-selling. Maggie Craig, director of conduct regulation at the Association of British Insurers, added: "Insurers have already done a lot of work to implement the measures outlined in the guidance and will continue to take the issue seriously and remain vigilant."