The financial services industry will need a clear distinction between the advisory market and the National Money Guidance Service suggested in the Thoresen Review if the scheme is to succeed, warns Skandia.
Skandia welcomes the fact Otto Thoresen, chief executive of Aegon UK and the review’s author, has recommended not including ‘advice’ in the scheme's title but says it will confuse consumers if it does not explicitly disclose its services.
Billy Mackay, head of marketing at Skandia, says: “The evidence that there is a gap in financial capability is indisputable, and so naturally initiatives such as the Thoresen review should be welcomed.
"However the key challenge will be in the implementation, and ensuring that those that most need guidance are able to and do receive it.
“Equally, it is imperative that the distinction between advice and guidance is completely clear and that consumers understand exactly what they are receiving, how they can benefit and be clear about any costs involved.”
The provider also says the issue surrounding how far guidance can go before it becomes advice remains “very grey”.
It highlights the Thoresen review makes it clear the Money Guidance scheme cannot give advice but refers to its staff as advisers.
Skandia says consumers must also know no compensation scheme will cover Money Guidance and when they have moved from the unregulated Money Guidance to the regulated advice sector.
The provider says: “If consumers think they have received advice but then find out that it was in fact guidance with the risks that go with it, then confidence in the concepts of saving and investment could again come under attack.”
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