Most advisers believe greater clarity is needed to help retail customers distinguish between advice and guidance in the market, according to research by Aegon UK.
A survey conducted by Censuswide, found that 86 per cent of respondents held this view, while more than half of the 200 advisers questioned for the poll felt the need to educate prospective clients about the differences between the types of advice available.
The survey findings were unveiled by Aegon UK in response to the Financial Advice Market Review.
Defining different ‘advice’ services in consumer, not regulatory terms and improving the cost effectiveness of full advice, including through tailored regulation for focused advice are among the list of four priorities Aegon UK has outlined for what it wants to see emerge from the review.
Steven Cameron, regulatory strategy director at Aegon UK said: “There is no silver bullet to closing the advice gap, but we believe an excellent starting point would be to address the widespread customer confusion around the differences between advice, personal recommendations and guidance.
“Consumers are understandably confused and find it difficult to distinguish between the boundaries and benefits of advice and guidance. We need to develop clear, intuitive definitions that truly resonate with customers, rather than being designed by regulators for compliance technicians.”
In a separate study, conducted by OnePoll, 65 per cent of a sample of 2,000 UK adults believed it was their responsibility to determine whether advice may be helpful.
Colin Hare, financial planner at the Surrey office of Argentis Financial Management, said: “The average man in the street probably does not know the difference between guidance and advice so I would agree that greater clarity is needed.
He added: “I think it is fair for customers to expect advisers to tell them whether or not they need advice.”