Research from Just, published today (October 15), found the concept of advice means different things to different people, with some believing they have received it from their pension provider.
The provider polled 1,000 people over the age of 55 in August and found of those who said they had received "advice" before accessing their pension, fewer than half (49 per cent) said they had seen a regulated financial adviser.
A third (34 per cent) said the advice had come from their own pension provider and one in five (18 per cent) said they were advised by Pension Wise, which is a guidance service that does not offer regulated advice.
Other sources of advice were friends and family (9 per cent), a specialist financial website (7 per cent) and the media (2 per cent).
Alistair Cunningham, financial planning director at Wingate Financial Planning, said he was not surprised by the findings and explained that many times when he gives information to a potential client, specifically stating it is not advice, the client still thanks him for the advice given.
He said: "It should be made clear when advice is being given and when it is only guidance however sometimes it is not as easy as this. I think I am making myself clear enough but it still not always understood by clients.”
"I do not believe people should be forced to get advice when drawing their defined contribution benefits but it should be made clear when they have not been advised and about the potential implications, for example the tax implications.”
Victor Sacks, independent financial adviser at VS Associates, agreed there was an "incredibly thin line" between guidance and advice.
He said: "If the words have come from someone who is held in high esteem, the recipient will believe they are receiving advice – how many people have followed the guidance given by well know financial presenters such as Martyn and Paul Lewis and respond by saying 'I took your advice'.
"Should guidance be guides? In other words, not information from an actual person, as that could be considered ‘advice’."
Stephen Lowe, group communications director at Just, said the regulator must work harder to ensure that people understand the difference between advice and guidance before making important decisions about their pension.
Mr Lowe said: “Ensuring everyone gets the benefit of impartial, free guidance unless they make an active decision to opt out is the job given to the Financial Conduct Authority by government.