Aegon wants to see the different ‘advice’ services defined in consumer, not regulatory terms, and called for technology to play a part in this.

The company has set out these proposals as part of its response to the FCA and Treasury Financial Advice Market Review.

Aegon said its four priorities for what it wants to see emerge from the review were:

1. Defining different ‘advice’ services in consumer, not regulatory terms
2. Developing a clearly defined service between no advice and full advice
3. Offering customers a ‘triage’ service to further help them find the type of ‘advice’ or support they need
4. Improving the cost effectiveness of full advice including through tailored regulation for focussed advice

Steven Cameron, regulatory strategy director at Aegon, said: “For each form of ‘advice’, we would set out to customers what the service will involve through the consumer’s lens, what it will and won’t deliver, who’s responsible for making decisions, where the individual retains personal responsibility, and what protections the customer has if things go wrong.

“While providers and advisers have important responsibilities to their customers, it’s time for the FCA and the Financial Ombudsman Service to look again at also defining personal responsibility.

“We also see a role for an industry-standard ‘app’ to help people select what form of advice or support may be best for them.”

He 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. Advisers seem to agree as 86% believe there needs to be clearer communication about the different types of financial advice and guidance available.

“The positive news from our research is that both advisers and consumers want to take responsibility for the problem as a majority of both groups see it as their job to either explain the benefits of advice, or seek out information as to how it can help.

“We believe there’s also a real need to develop a service that sits between full professional advice and ‘no’ advice to plug the advice gap. This needs to be available from a wide range of sources in the public and commercial sectors. And it needs to be scalable, with obvious opportunities through digital and workplace.”