Advancement Through Quest Completion

Quests, adventures, campaigns, whatever you want to call them. They are the player's goals. I am going to have advancement in my game be tied to completing a quest (Succeed or fail). I hope this would solve a few problems. It would give an incentive for GMs and players alike to have goals, and I think it could potentially lead to better stories.

What I was going to do, is grant two forms of advancement. You can gain experience points (point buy advancement) for completing quests of your tier (think level) and you increase tier when you complete a quest of a tier above you. This will push players to want to take on larger challenges.

Are there any games that handle advancement this way? Also, what are your thoughts? Any problems that I may not have foreseen?