Shares in Moneysupermarket.com have fallen 8% to 100p on fears that the financial watchdog is to investigate financial comparison sites over unauthorised advice.

The Financial Services Authority (FSA) is understood to be preparing an investigation into websites that compare insurance products.

Reports suggest it will look at whether the ranking of insurance products online by price constitutes giving financial advice.

Many comparision website are allowed to arrange insurance but not give advice.

The British Insurance Brokers Association has asked the FSA to tighten the rules. Its members – namely traditional insurance brokers – must meet strict regulations to give advice.

Hayley Parsons, managing director of insurance comparison website Gocompare.com has lashed out at the mooted probe. She said: 'All the major insurance comparison sites are already authorised and regulated by the FSA, as are the insurance companies and the brokers who appear on them.

'Had BIBA’s comments come two years ago I might have agreed with them, however the new players in the comparison market have led the way in terms of providing far more product information to help consumers make the most informed choice and find the best product for them.'

Motor insurance comparison site Confused.com, which is part owned by Admiral, supports BIBA's view that the FSA rules are not appropriate, 'because they were finalised prior to the development of price comparison websites.' Shares in Admiral were down 2% to 926.5p in early trading on Tuesday.