The Financial Services Authority's (FSA) review of the quality of point-of-sale income drawdown advice is in danger of missing a greater risk to clients, an expert has warned.
The FSA launched its investigation into the quality of drawdown advice in October last year, sending out questionnaires to firms to check they are implementing the latest rules properly.
The review also involves checking the quality of advice before drawdown rules were changed last April, the FSA has since confirmed.
However, the investigation has not focused on the ongoing advice given to clients who have been in drawdown for a number of years and who face the greatest risk from poor advice, Andrew Pennie, marketing director at Intelligent Pensions, said.
"The review is looking at the quality of point-of-sale drawdown advice, not the ongoing service provided by IFAs," he said.
Pennie added there is a risk some advisers have put their clients into drawdown and then failed to follow that up with appropriate advice on how to manage their pension pot.
"The FSA needs to ask advisers ‘what advice have you given to people who have been in drawdown for ten years?'.
"The regulator will probably get to this, but not during this review."
Pennie said that, between the ages of 70 and 80, clients in drawdown should be looking to annuitise in most situations as they are increasingly exposed to the risk of running down their fund or making investment losses which they do not have time to recoup.
A spokesperson for the FSA said: "This is an ongoing piece of work looking at the quality of advice for both new and existing clients on income drawdown products within the smaller retail intermediary sector."
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