FSA proposals requiring advisers to demonstrate ongoing CPD in all core competencies, even if they do not operate in every area, discriminate against specialist intermediaries, AIFA says.
In its response to June's consultation paper on professionalism, it urges the FSA to "reconsider" the requirement for advisers to maintain competencies across all core areas regardless of their customer base.
It says it is "unreasonable" to expect advisers to spend time learning subjects they will not advise on - particularly in light of the move towards specialist forms of advice.
"The FSA's requirement effectively discriminates against specialist advisers by requiring them to demonstrate continuing competence in an area they do not provide advice on," it says.
"Indeed, the likely outcome of the RDR is more specialists due to the breadth of the new wider product definitions and we can expect to see a rise of the 'chambers' business model, where a firm is an amalgamation of specialists and a reduction in the number of holistic general financial planners."
AIFA has also questioned the value and relevance of a statement of professional standing (SPS) for advisers.
They have been proposed by the FSA as a means of confirming to clients they are qualified to give advice, have kept their knowledge up-to-date and subscribe to a code of ethics. They would be issued by FSA-accredited professional bodies.
But AIFA says consumers will not recognise the different levels of qualifications and generally rely more on personal recommendations.
It said it "would not matter" to a consumer if the adviser was certified or chartered.
"While supportive of SPS certificates in general, we would question how these certificates would actually help to renew customer confidence in the industry."
Furthermore, it says it would make more sense for the adviser's firm - rather than accrediting bodies - to be in charge of awarding SPSs.
"If this proposal were to go ahead, we would question the logic of the accrediting body authorising these statements," it says.
"FSA has stated that firms are best placed to assess their advisers' competence and it would make more sense for the firms to be responsible for authorising the practicing statements."
Meanwhile, AIFA thinks thinks firms should play a greater role in regulating their own advisers.
It says the FSA's growing focus on individuals is risky and could produce a "conflicting outcome". It adds it would like to see more of a focus on firms as part of a "well articulated future vision" post 2012.
"Many of the RDR objectives relate to firm level success factors - to create a robust, well run, well capitalised sector.
"However, AIFA is concerned the additional focus on individuals could drive a conflicting outcome; the focus FSA has placed on non-executive directors (NEDs) in the intermediary space has made it more difficult for firms to recruit and attract good external NEDs."
This, it says, could lead to firms incurring more costs and being less well governed.
Michael O’Brien and Sandip Patodia taking over
Neil Brown appointed interim head of UK wholesale distribution
Whose rules OK?
Latest news and analysis
To focus on STAR