In its submission to the Financial Advisers Act issues paper, the association said  the distinction between AFAs and RFAs caused consumer confusion and it was in the interests of consumers and advisers to remove it.

The submission said the Code of Professional Conduct should then apply across the industry. The code requires higher compliance standards, particularly around issues such as determining the suitability of advice for clients.

It called for all advisers to meet a minimum level five qualification and maintain an ongoing professional development plan.

The idea is not unique: Many other submissions on the issues paper made the same argument, saying the RFA concept was no longer useful.

But the PAA’s membership is made up largely of RFA advisers who would be most affected by a move to require them to live by the higher AFA standards.

The PAA said its polling suggested two-thirds of PAA's RFA members supported a single competence standard across the industry. More than 70% liked the idea of a single conduct standard.

But PAA members spoken to by Good Returns were not so sure.

Katrina Church, the association’s Insurance Adviser of the Year, said while more education should be encouraged, there would be few benefits to RFAs if they were required to step up to the AFA level of compliance.

There would potentially be many pitfalls, such as having to get into conversations about commissions with clients who would not understand the system but also would not be willing to pay a fee for advice instead.

“It’s safer for me to be an RFA than an AFA… I don’t know if being an AFA brings a lot to the table.”

She said the role of the associations should be to motivate and inspire advisers to higher standards, not dictate.

PAA adviser Dave Windler, of the Mortgage Supply Co, did not support the idea, either. "It would seriously impact high-volume advisers. The best questions to ask is do our clients want us to become AFAs? I reckon they would say 'what's an AFA? I just want my lending done well, under the right terms and quickly'. Every day we work to timelines across multiple clients. All an AFA process would mean is we miss finance dates and settlement dates trying to meet compliance standards."

Another PAA member, Onny Faleafa, said he thought the existing system of RFAs and AFAs was working well.

But he said it would not be difficult to step up to AFA level if required because he had already done the level five certificate.

Another adviser who did not want to be identified said the change would be onerous but many had thought it was likely to happen.

Church said the key was for all advisers to deal with clients in a professional manner. “Then whether someone is an RFA or an AFA should not matter.”