Advisers have been warned they are facing a crackdown on product governance rules in 2019 and have been urged to make sure they comply with the regime.
The product governance element of Mifid II is aimed at making sure advisers are offering their clients suitable solutions by requiring product manufacturers and distributors such as advisers to identify target markets.
But there is widespread concern that advisers are not complying with the regime, with some estimates suggesting only one in 10 advice firms is meeting the rules.
During 2019 the Financial Conduct Authority is scheduled to review how the Retail Distribution Review is working, six years after it came into effect, and it is also expected to reassess its suitability review next year as well.
Rory Percival, a former technical specialist at the FCA, said it would be "daft" of the regulator not to take these two issues together and combine them with a review of whether advisers are complying with product governance rules.
He said he had recently been doing an adviser roadshow with a large provider and when he asked the audience if anyone had heard of the product governance rules he said it was "less than 10 people in a room of 100" most of the time.
He said: "I would simply say that almost nobody has done anything about it. If the FCA was to look into this today it would be extremely disappointed with what it found.
"It is a process you need to go through, but it is not a complex one. The hardest bit of the process is having a good understanding and segmentation of your client bank. The rest of the process falls into place in a reasonably straight forward manner."
Andy Sutherland, managing director of advisory services at compliance consultancy TCC, echoed Mr Percival's concerns about a lack of compliance, saying one in five of the firms he had encountered were meeting the regime's requirements.
He said: "I don't think firms have really understood what they should be doing.
"But it makes good commercial sense to think about this, to think about who you see as the target end client."
Mr Sutherland also anticipated the FCA would look into this area as part of its RDR review next year.
The FCA had product governance requirements before the introduction of Mifid II in January, but they were narrower than the new rules in terms of the financial instruments they covered.
Under the new rules, manufacturers - such as fund managers - must define a target market for each of their products.
Advisers will need to be aware of these and consider this when giving advice, which is what prompts the need for client segmentation.
They must also report any sales outside the target market back to the manufacturer - though there are no rules to say selling a product outside its target market is necessarily wrong.