Beware the Life and Pensions Industry is back to its old tricks. Starved of genuine new business for the past two years, it is clear from official figures that it has resorted to cannibalising exiting investments. These are being shuffled from one office to another as new sales. Punters are being told whatever yarn is necessary to switch funds. Intermediaries are being incentivised with fat commissions which would otherwise boost client investment. But with clients also getting some incentive, these questionable sales practices are designed to look victimless

The Financial Regulator would be very foolish to believe that its statutory code of conduct, designed to regulate sales advice, can counteract fast rising commissions in a deep recession and prevent a wave of mis-selling. From 2002 to 2007 sales of new investments outran payouts of existing investments by between about €2billion and €3.4 billion a year, signalling genuine acquisition of new cash by the industry.

But over the past two years that has changed dramatically with payouts and new sales closely matching each other indicating that most new sales are simply cash sloshing around from one Life office to another while salespeople gorge on historically high commissions - but for delivering what added value to clients?

Over the past two years sales ran close to €14 billion. The question the regulator has to ask is how much of these sales was justified with sound advice and how much was plain old fashioned churning?