At the moment, only authorised financial advisers are covered by the code, which dictates their client care and ethical obligations as well as CPD and qualification requirements.

Code committee chairman David Ireland said a big problem with the current regime was that the code only applied to a small number of advisers who were AFAs. RFAs and QFE advisers do not have to abide by the same rules.

"If you look back six years to when the act came in, the very small number of AFAs was not predicted at the time. Initially 20,000 was the figure talked about and then that narrowed to 5000, then it ended up at less than 2000. It meant the code was not really as effective as it could have been."

He said the proposed changes to the code would fix that, with no escape from it if someone was providing financial advice of any sort.

"The code will end up being a more complicated and extensive document than it currently is," he said.

"It's ironic that with the law reform, where one of the key aims going in was to simplify the regime, a necessary consequence is that it will end up with the one simple piece of the current regime being the most complicated feature of the new regime. but I don't think it's a bad thing."

Ireland said the new code committee would have the flexibility to create something that would remain appropriate and easy to digest.

"That's a challenge for the code committee, to work out how this is going to look. Whether the code committee with a broader ambit will say 'we like the current structure and approach to the code and we are just going to add more parts to cover the array of financial advisers who need to be covered', or start again with a new look and feel for the code. I don't know. That's an important process for the new code committee to undertake. The code committee is going to play an integral part in shaping the new regime and how it is going to work."

One of the first key questions for it to tackle is what qualification requirements will be imposed on advisers.That is not being dictated by the FAA but will be left up to the code.

Ireland said the level five financial advice qualification could work. 

"The level five certificate with its specialist strands does lend itself to being a fit-for-purpose base level qualification but whether that's required for all financial advisers, I don't know. For some, level four may be sufficient but others might need CFA level. I hope it does not get too complex because with great flexibility and power comes the risk of smothering the regime with too much granularity," he said.

He said he hoped the code could continue with a principles-based approach.

Ireland said it would be best if the code committee did not become too much bigger because there was a risk it could become unwieldy with a lot of members.

More consultation is still to come on the likely recommendations for the code committee and the Financial Advisers Disciplinary Committee.