The Association of British Insurers is urging the Financial Services Authority to keep financial advisory roles polarised – or risk confusing the public.
Polarisation is the system where advisory roles relating to investment products are segmented into independent intermediaries on the one hand, and tied agents on the other.
A statement from the ABI said: "We believe that effective competition, consumer protection and the promotion of savings should be the guiding lights here.
"Abandoning the clear distinction between independent financial advisers and advisers tied to one another would confuse customers and could damage their interests. It could also have unpredictable effects on the market."
The ABI's call comes in response to an FSA consultation on polarisation that asked for views on:
"We favour maintaining the distinction and are keen to work with the regulator and the Government to assess possible improvements," the statement read.