In its submission on the Financial Advisers Act review options paper, the association said it supported one classification of adviser, with the provisions that currently apply to authorised financial advisers applying to everyone.

“There would be no distinction in the FAA between personalised and class advice, or between category one and two products,” it said in its submission.

But the Code Committee would have flexibility to specify code standards that applied in certain advice situations so conduct and complexity requirements could vary depending on the complexity of the advice.

The PAA recommends a two-step transition period to move advisers who are not currently AFAs to the new standard.

When the new legislation kicked in, advisers would have six months to apply for authorisation. The FMA would then have three months to approve or reject the application.

Advisers would have three years to use their CPD hours to meet new competence standards.

“The exception would be a core knowledge standard (that could be examined by multiple choice) which would have to be accomplished before initial authorisation,” the PAA said.

Such an approach would lessen the emphasis on minimum entry standards and focus on advisers’ qualification journeys, the PAA said.

Precisely what the competence standards were should be left to the Code Committee.

The PAA also argued for a broadened definition of sales to include an opinion given by an adviser entity through salespeople, in respect of its own products.

The entity, or person acting on behalf of the entity, would have to make clear that it was a sale and that any person involved in providing it was a salesperson.

QFEs would be abolished. The Code would not apply to sales activities, but the Adviser Business Statement would describe how the sales conditions and warnings would be internally policed.

The PAA said a central feature needed to make the arrangements work was an External Compliance Assurance (ECA) Package.

“In recommending this, we are deliberately distinguishing between the supervisory activity at authorisation - which we believe is best handled by the regulator - and the ongoing supervision of the adviser’s activities, which we believe is best handled by the industry, but subject to regulatory oversight.”

One or more professional associations could develop a process of review that the regulator could rely on.

“Importantly, we believe while in part it could take the form of an agreed-upon procedures review, it should also include a peer review element. In the case of peer review, we consider professional associations are best placed to coordinate such activity.

“Professional associations thus contribute to this new regulatory landscape in three key respects: competence, compliance and consumer awareness. For competence, we co-ordinate the provision of high-quality training and CPD. For compliance, we co-ordinate the provision of External Compliance Assurance, delivering at least the peer review component and delivering or partnering with other providers on the more routine checking. For consumer awareness, we raise public awareness of the uses and benefits of advisers and advice.”