The reforms form part of a series of changes in the financial services industry laid out in the Retail Distribution Review by the Financial Services Authority (FSA).
The aim is to stop staff being motivated by commission payments when selling policies such as private pensions.
New rules mean customers must be quoted up-front fees, and be informed of future charges. Sales staff or financial advisers will also have to state if they are independent, or restricted to just selling the policies of particular financial groups.
Advisers now also have to subscribe to a code of ethics, hold an appropriate qualification, carry out at least 35 hours of continuing professional development a year, and hold a Statement of Professional Standing from an accredited body.
Linda Woodall, head of the investments intermediaries at the FSA, said, "The changes will improve customer confidence - we want people to feel that they are getting a service from their financial adviser that is relevant to their circumstances and in their best interests.
"Customers will now know how much advice is costing them, the service that they are receiving and be reassured that their adviser is qualified."
Commission-driven sales have been blamed for recent mis-selling scandals, including payment protection insurance. Even apart from those scandals, the FSA says mis-selling in general in 2010 was costing UK financial consumers about half a billion pounds a year.
The new policies will also stop the practice of businesses such as fund supermarkets or online discount stockbrokers accepting payments from some of the investment funds whose policies they are selling, which is also thought to lead to biased sales.
These will come into effect by the end of 2013.