Majority can't differentiate between guidance and advice

Additionally, the same proportion (75%) of consumers think that there should be clearer communications about the different types of financial advice and guidance available to them.

Additionally, only a minority of people are confident making financial decisions regarding pensions and investments themselves. For example, just 20% would be confident deciding how to access their pension, while only 12% were confident reviewing the performance of their pension or investments.

Aegon says that part of the problem stems from people’s relatively loose conception of what constitutes financial advice. For example, 27% believe that a recommendation from a friend can be financial advice while 26% also view information on online forums as advice, while 22% count information in their morning paper as advice. This underlines the pressing need for greater clarity on what advice actually means and more information about what benefits consumers should expect from financial advice.

Steven Cameron, Regulatory Strategy Director at Aegon, commented:

“People are being presented with choices not only regarding how they access their savings at retirement but also around how they seek help. There are lots of ways of seeking help, whether it’s through regulated financial advice, guidance via Pension Wise or information from their pension provider. The problem is that people are confused by what they get under each of these options and if that’s not clear, how can we expect them to make an active choice?

"It’s good to see people want to take personal responsibility, with a clear majority (65%) of people believing that they are ultimately responsible for educating themselves on the benefits of advice, and only a minority believes this is the responsibility of government (27%). That said, the industry needs to work hard to explain how professional advice differs from guidance in terms of the responsibility advisers assume and also around access to compensation schemes if things do go wrong. We need to reduce levels of confusion and get more people seeking the right form of support for them.”