Research by the investment firm found that 71 per cent of people think investments are “confusing or very confusing.”

The company questioned over 2,000 people who had invested in unit trusts, investment trusts or equity Isas.

Over half of the people questioned said that providers “could do more to make products clearer” while 13 per cent went even further to say that providers “urgently need to rethink how to make their products clearer.”

People who used discretionary advisers had even less understanding of the markets, with 80 per cent saying they find investing confusing.

However, 20 per cent of people say investing is not confusing and the providers did offer clear products.

Simon Ellis, managing director of unit trusts at L&G, said: “L&G Investments believes that the views of the end consumer must be sought and their needs taken into account more thoroughly.

“Ultimately, they are the ones most at risk from poor definitions and it is the lack of clarity at consumer level that has prompted this review.”

The research coincides with the delay to the IMA sector changes from active, balanced managed and cautious to A, B and C.

Mr Ellis said: “We welcomed the IMA’s decision to delay implementing the changes to the managed sectors but we maintain that it is important to get closer to the ‘right’ answer rather than the ‘quick’ one.

“If the new definitions are to be recognised as fair and robust by users and regultors, the IMA must evidence that consumers and advisers have contributed in a meaningful way to research and this should form the foundation for any charges.”