It says a clear distinction is needed between the advisory market and the guidance service if it is going to serve consumer interests and be a success.
Skandia says risk warnings must be provided about possible disadvantages of not seeking advice. It believes clarification is needed on how far guidance can go before it becomes advice, as well as greater clarity for consumers who are moving between unregulated and regulated activities.
Money guidance will not be covered by the Financial Services Compensation Scheme so Skandia says consumers need to understand whether they have received advice and realise they are not covered by the FSCS.
Head of marketing Billy Mackay says: “The evidence that there is a gap in finan- cial capability is indisputable and initiatives such as the Thoresen review should be welcomed. However, the key challenge will be in imp- lementation and ensuring that those who most need guidance are able to and do receive it. 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.”