The Financial Conduct Authority has admitted there is "absolutely a risk" that the current plans for an adviser directory could result in consumers being misled.
David Blunt, head of conduct specialist at the FCA, said the regulator was aware the directory could be perceived to be inconsistent because firms will be asked to self-certify employees in various roles under the incoming senior managers regime.
He said the FCA had received more responses to its plans to turn the register into a directory than to any other consultation it has produced on the senior managers regime giving it "plenty of food for thought."
From December 2019, the regulator will only approve senior managers while firms must assess and certify employees they consider to be in a position that could cause significant harm to consumers.
This summer the FCA proposed creating a new directory of individuals and firms to address a problem that would have meant only senior managers would have appeared on the FCA's register.
The prospect of large numbers of people - including most financial advisers, portfolio managers and traders - no longer being visible on the register had prompted concerns about consumers being more exposed to financial scams.
When launched the directory will include information on all those who hold senior manager positions, which require FCA approval, and those whose roles require firms to certify that they are fit and proper, which do not.
It will include details of where they work, what roles they hold, what type of business they are qualified to do and whether there are any regulatory sanctions or prohibitions against them.
The creation of the directory is also aimed at meeting the recommendations of the Work & Pensions select committee, which highlighted flaws in the register during its inquiry into the British Steel Pension Scheme.
Speaking today (16 October) at the City & Financial conference on the senior managers regime in Kensington, Mr Blunt said: "Our directory proposals were driven by feedback on the regime that it was important for individuals and firms to see who was in significant harm functions.
"We have much food for thought. From a user perspective, we want you to be in a place where you can have a comprehensive search of database. Comprehensive searches delivering comprehensible results is our aim for the directory."
But during a question and answer session, it was pointed out to Mr Blunt that the regulator was relying on firms to upload their own lists of individuals they had certified as fit and proper.
The audience member raised concerns that the register would therefore not allow consumers and businesses to compare like for like as it was reliant on firms being consistent across the country in what they consider a fit and proper person to be.
As a result, the audience member pointed out, the FCA directory could mislead firms and individuals hunting for an adviser into thinking all individuals listed were deemed by the regulator to be fit and proper.