Aifa has questioned whether the Financial Ombudsman Service will be able to endorse primary advice when there is no clarity over who is responsible for product suitability.
Deputy director general Fay Goddard says the industry needs absolute clarity over whether ultimate responsibility lies with the primary adviser selling the product or with the consumer.
She also says the way primary advice is being promoted implies that if an adviser follows scripted processes, it will be very difficult for the consumer to complain.
She says: “I can understand that in a regulated environment. However, while the ombudsman has to take store of regulation and legislation, it actually has the ability to make adjudications outside both of those.
“It is an independent body and if it says I do not care if you followed that process or went through that script, if it thinks the position that the consumer is left in is not fair or reasonable, then it can adjudicate against the firm.”
FOS spokeswoman Emma Parker says it is too early to comment.
Informed Choice managing director Nick Bamford says Aifa is focusing on the wrong end of the problem. He says: “It should be focused on how we deal with what the FSA perceives as being a broken model and that is actually not at the primary advice end, that is up at the other end with the two proposed levels of professional financial planner and general adviser. None of its members are going to be primary advisers.”