Financial advisors in the U.K. will be banned from taking commissions to sell investment, life insurance and pension products to their clients, according to new rules announced today by the Financial Services Authority. Industry professionals say the regulations will help clean up an industry plagued by bribery and corruption for years, the Financial Times reported.

Financial advisors will have to tell their clients upfront how much the advice will cost, and give them the choice of paying for advice as a fee or having it deducted from their investments. “Crucially, the amount the adviser receives for recommending a product will be negotiated with the investor, and not determined by the product provider,” according to the newspaper.

About 80% of advisory work performed by the 35,000 independent financial advisors (IFAs) in the U.K. is commission-based, according to unbiased.co.uk, the professional advice Web site cited in the article. Another 50,000 financial advisors who work as agents of banks and insurance companies also work on commission, the newspaper said.

The FSA also will require that advisors explicitly explain the distinction between independent and restricted forms of advice. The former involves recommendations from a broad sweep of market products and should be “based on comprehensive and fair analysis,” said the Financial Times. Firms specializing in restricted advice are ones that give recommendations based on their own product menu.

“This is a great day for the consumer,” said Andrew Fisher, chief executive of advisory firm Towry Law. “It is a ban on the bribery and corruption that has plagued [the] industry. Mis-selling driven by commissions should now end.”

Critics, however, say the new rule will force many advisors to leave the profession altogether. Consulting firm Oxera said the IFA channel could lose about 20% of its pool of advisors. Most of those professionals could jump to the so-called restricted sector, according to the newspaper. “The FSA position on factoring [advancing payments to advisors] will exacerbate this,” Drew Fellowes, head of insurance advisory at KPMG told the Financial Times. “Consumers will lose out if advisors exit the industry and providers cannot meet demand for low-cost distribution.”