The Financial Advisers Act is due to be reviewed next year and there have been suggestions that the registered financial adviser designation should be dropped.

Massey University school of economics and finance senior lecturer Mike Naylor said there was still a place for RFA advisers.

But he said new terms were needed to describe all advisers.

He said the current AFA, RFA and QFE designations were not easy for the public to understand. “For people in the industry the difference between an AFA and an RFA is clear but not in the minds of the public who have no clue.”

Naylor suggested it was worth considering a system like Britain’s. There, advisers who can only advise on a limited number of products, such as QFE advisers, are called restricted advisers. “Maybe we need something like that, we need one for people who can only give advice on their own products… there’s the impression when an adviser is recommending a product that it is the best in the market but most people are saying this is the best product I can give you and there may be better products out there.”

Naylor said other professions, such as law and accounting,  made it clear which people were the most qualified. “You have a lawyer, a law clerk, a chartered accountant, an accounting clerk. People understand that. We need to have words people understand.”

Most other countries also required a degree as the basic qualification for advisers, he said.

The term to describe RFAs should make it clear that they were qualified to give a lower level of advice, he said. “RFAs should be restricted to easy products… income protection and products like that are as complex, or more complex than a mutual fund.”

He said membership of a professional body should also be required.