The Financial Services Authority (FSA) has stated that small firms in the UK often ignore the advice they are given on proper compliance.
Up to a third of small financial advice, mortgage and general insurance firms do not act on recommendations from their consultants on how to better improve their compliance, a study by the FSA found.
Jonathan Fischel, head of investment in the small firms division of the FSA, said: "Firms need to meet their regulatory responsibilities and respond to any compliance failures that have already been identified by their consultants.
"Firms should always take appropriate action to be compliant."
Just because a firm employs consultants does not mean that it should assume that it is compliant, added Mr Fischel.
Recently, the FSA stated that it maintains a "tough stance" on firms that do not meet its minimum standards.
The permissions of 151 small firms were cancelled by the FSA in 2006/07.
Mortgage firms have also come under pressure from the FSA recently to stop charging large mortgage exit fees.
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