The regulator has examined benefits provided and received by providers and advisory firms and has laid out its key findings, following a thematic review in 2015.

This covered those conducting MiFID business, and those carrying out regulated activities in relation to a retail investment product.

The FCA report stated: “Hospitality provided or received did not always appear to be designed to enhance the quality of service to the client. Individuals from firms had participated in or spectated at sporting or social events, eg golf, tennis, concerts.

“These benefits did not appear capable of enhancing the quality of service to clients as they were either not conducive to business discussions or the discussions could better take place without these activities.”

Officials said the regulator expects firms to consider and assess whether all aspects of the benefit are designed to enhance the quality of the service to the client when providing or receiving a non-monetary benefit.

This included the location and nature of the venue, and those activities, which are not conducive or required for business discussions, such as sporting and social events and activities.

The FCA found instances where hospitality that was not designed to enhance the quality of service to clients is offered in connection with other benefits that do meet the requirements.

This included sporting activities like playing golf or attending rugby games provided after participation in training events, the FCA said, and evening dinners, which were not themselves designed to enhance the quality of service to clients, were also provided to local attendees after conferences.

Officials found that hospitality logs did not always record relevant detail or were not well maintained and occasions where some benefits had not been recorded at all, as well as examples where full details including who the recipient of the benefit was.

The FCA warned: “Where an activity or event provides a number of non-monetary benefits, you must consider each benefit separately.

“Just because one benefit provided by the firm is designed to enhance the quality of service to a client and is capable of being paid or received without breaching the client’s best interest rule does not mean that another benefit (that does not meet these requirements) can be included in or alongside the compliant activity or event.”

In January 2014 the FCA issued Finalised Guidance 14/1: Supervising retail investment advice: inducements and conflicts of interest. This explained concerns and why certain practices were said to be likely to create conflicts of interest and result in firms not acting in their customers’ best interests.

The FCA is not going to publish a thematic report because the work will be taken into account in its planned MiFID II consultation paper.