The Chartered Insurance Institute says advisers should have a six-year window to get the diploma in financial planning and must be part of a professional body which will police behaviour.
In its third position paper on the retail distribution review, the CII says advisers in the professional financial planning and general financial adviser tier would have four years to achieve the diploma with an additional two years where they could work without the diploma as long as all advice was signed off with a suitably qualified supervisor.
The clock would start ticking when the FSA publishes its full consultation paper on the RDR, due next year.
After the six-year period, the CII says all advisers not at this level should be classed as primary advisers.
Entrants to the market would have to achieve the diploma from the outset of the rules being introduced.
The CII says the separation between the categories of PFP and GFA is a secondary issue as the organisation expects GFA to only be temporary.
The paper suggests that all advisers aspiring to excellence in financial advice should be encouraged to attain chartered status but it should not be a requirement of reaching PFP status.
It says membership of a professional body must be mandatory, incorporating continuing professional development and a “rigorously monitored code of ethics and conduct”.
CII financial services director Steve Jenkins acknowledges that compulsion and overseeing a code of ethics and professional development will be a massive step-change for the industry and give the CII and other bodies huge power and responsibility.
He says making membership of a professional body compulsory would offer increased resources for the CII to deal with its new responsibilities.
Deputy president Trevor Matthews says: “Professionalism in financial advice is an idea whose time has come. It is right that we demand the highest standards of our financial advisers but at the same time we must address the serious question of how advisers are enabled to reach those standards.
“The package for professionalism paper sets out a practical roadmap for the industry to debate and try to develop a consensus. It allows the industry to start to focus on how we can manage the transition that will be required when the FSA consultation is completed next year.”
Jenkins says: “Change can be hard, especially when the regulatory dividend appears distant and the cost and effort much more immediate. But the timescale to move to the position outlined needs to be as swift as possible to achieve the step-change required while realistic enough to allow advisers to make the transition effectively.”