Society of Independent Financial Advisers chairman Murray Weatherston describes being "underwhelmed" by the guidance note issued on Monday.

"Certainly for me it doesn't clarify the issue that is in debate at all," he says.

Institute of Financial Advisers (IFA) president Lyn McMorran says she is glad the commission put the guidance out, but also does not think it creates the certainty the industry was looking for. She believes the definition of a financial planning service remains too broad.

But Securities Commission head of supervision Angus Dale-Jones, says it is a common sense approach that lies behind its guidance and stresses the importance of the phrase "nature of the service being provided" used in the legislation.

He adds that advisers uncertain as to whether or not they need to be authorised probably should be, although he says it is not about insisting that everyone gets authorised.  

Weatherston says the key industry concern is around term insurance, a category two product.

"In order to do term insurance properly you need to do a needs analysis and the issue is does that actually constitute a financial planning service or not?" he says.

McMorran says the IFA's view is that everybody should have a good advice process, but that it does not automatically make them a financial planner. She also has questions around where products such as income protection and trauma cover sit.

Dale-Jones says the legislation clearly states that when advice is over a simple product sale that does not spark a broader conversation about the client's financial situation, then the adviser need not be authorised. He gives the example of a client asking to put $100,000 into a term deposit - a category two product.

However, the same client asking for the best way of managing their finances to do "something sensible" with $100,000, is instigating a broader conversation and the nature of the service required is different, he says.

Dale-Jones says: "If they think they're having a broad enough conversation with their client to warrant a conversation about the financial situation, it's precisely those people who we think should be getting authorised."  

He adds that tweaks are made to the definitions of category one and two products as part of the Pre-Implementation Adjustments Bill and advisers should keep an eye on that.

He also stresses the importance of care, diligence and skill in relation to the service being provided and that advisers should be looking seriously at the qualifications they hold. If they are looking at higher level qualifications, it is "probably just as well" for them to become authorised, Dales-Jones says.