The definition of financial adviser which previously encompassed investment advisers, insurance advisers and mortgage brokers has now been split.

They are now separate categories with different rules applying for brokers and financial advisers.

Previously a person performed a financial adviser service if they gave financial advice, made an investment transaction or provided a financial planning service.

Now a person performs a financial adviser service if they give financial advice, provide a discretionary investment management service or provide an investment planning service.

The definition has been clarified to try and avoid the issues raised by many submitters around the borders between genuine financial planning and simply providing a needs analysis before recommending a particular product, such as insurance.

The new wording is helpful in this respect referring to "an analysis of the individual's current and future overall financial situation", although the same arguments can still be made.

This means that insurance advisers now have three options to become either an AFA, a registered individual or a QFE adviser.

PAA chief executive Edward Richards says the original driver of the FAA was to address the investment world where mum and dad investors were hurt when finance companies failed.

He says insurance and mortgage brokers got dragged into the legislation and the line became blurred even though they weren't the primary focus. He believes the announced changes provide more clarity.

He says even though changes have been made, many insurance advisers have started down the education track investing a lot of time and money to becoming authorised.

"I think many will want to progress with authorisation now they have started rather than turning around, even if they are not providing investment advice."

He says the PAA board has not analysed the changes properly and it needs time to understand it before it advises people about what they should do.

Life Brokers Insurance Association president Ron Flood says older brokers who may have been looking to leave the insurance industry early because of authorisation will now have more time to transition out over the next few years with the rules having changed.

He says this may give them the opportunity to mentor new brokers coming into the industry.

"It's good news for good news for risk advisers that just sell risk, but we feel advisers should get authorized so they can offer more comprehensive services."