Radical proposals to shake up the way pensions and savings products are sold to the public will be unveiled next week as the financial regulator moves to protect consumers from what it says are "grave gaps" in the market.

A discussion paper to be published by the Financial Services Authority sets out a series of ideas, including plans to grade and license financial advisers. The document, developed by the industry at the behest of the regulator, contains proposals for greater transparency on the commissions that are paid to advisers to promote specific products.