The disagreement stems from the Financial Services Authority's recently published retail distribution review, which looked at selling of financial products. In response to the review, ABI proposed introducing a new means of selling products, known as assisted purchase. This involves no formal financial advice for consumers, but they are able to consult experts about the suitability of products for their needs.

But Skandia claimed the proposal blurred the distinction between sales and advice and would confuse consumers, adding that the ABI's own research showed that 66 per cent of people who had bought a product during an assisted purchase trial thought they had received advice.

Nick Poyntz-Wright, chief executive of Skandia UK, said in a statement that: "For some time now we have viewed ourselves as different from more traditional life insurers and have felt a lack of alignment with the broader membership of the ABI.

"We offer our investment solutions only through financial advisors because we believe passionately in the importance of quality advice to guide and support customers' financial decisions."

He said that ABI continued to do good work, lobbying for clean corporate governance and fair taxation.

In a counter-statement, the ABI said it did not recognise Skandia's description of its members. "ABI is made up of a wide range of excellent financial services, asset management, advice and protection companies. On the Retail Distribution Review, we make no apologies for standing up for consumers," said Stephen Haddrill, the body’s chief executive.

Skandia UK says it strongly supports the FSA's proposal for there to be a clear distinction between advice provided by a professional adviser working on the client's behalf, and sales made by a representative of the product provider, according to a statement.