Mr Lawson, Aviva’s head of financial research, said providers were forced to sit by as their clients made bad decisions for fear of straying into offering financial advice.
He said: “Currently we are watching people make decisions at retirement which we know are the wrong decisions, such as taking all their money and putting it into their bank account or taking all their money out in one lump sum.
“We could suggest they spread it over a few years and reduce their tax burden but we cannot say it to them because it is a personal recommendation.
“That has got to give. We have to find a new boundary.”
Aviva is not the first to complain about being hampered by the definition of advice.
Earlier this month the Association of British Insurers said it is working on a proposal for an income drawdown comparison tool but said it was proving difficult because it was trying to avoid straying into advice.
Last month the Financial Conduct Authority was told to clarify its definition of what is known as streamlined advice, as a third of those not currently offering it want to do so in the future.
As part of the Financial Advice Market Review’s aim to close the ‘advice gap’, the FCA is consulting on updating its guidance on an advisory service that meets a simpler or focussed consumer need, so called streamlined advice.
Steven Cameron, pensions director at Aegon, said there is a huge swell of opinion predicting the growth of this area of advice, with 80 per cent of advisers polled by the provider expecting an increase in demand for streamlined advice services.
However, this optimism relies on removing certain barriers to the future success of streamlined advice.
By far the greatest barrier is regulatory risk, with 62 per cent of advisers citing this as a concern.
Advisers frequently bemoan the regulatory burden on them for even relatively simple advice.
Nick Bamford, executive director of Informed Choice, said the issue facing advisers was the complexity of doing their job.
He said: “There is far too much paperwork. If I was to advise a married couple investing in an Isa, leaving aside my own reporting, they would probably be faced with 130 pages of documents. Frankly they are never read.
