The Financial Services Consumer Panel has raised the alarm over non-advised sales of income drawdown from next April.
Speaking at the Taxation of Pensions Bill committee hearing yesterday, FSCP member Teresa Fritz said the prospect of growth in non-advised drawdown in the wake of the Budget reforms is a major worry.
Pension providers have already raised concerns about savers entering into complex drawdown contracts without taking financial advice.
Earlier this year, the FSCP published an influential report highlighting a growth in problems from the use of online non-advised annuity sales.
Fritz said the issue of non-advised sales is even more urgent with drawdown and could see customers sold inappropriate products.
She said: “The big area of concern is the growth of non-advised streams. It was worrying enough with just annuities but is more worrying with complex products like income drawdown. For regulated IFAs it should be business as usual, they will just have more customers.
“If they have gone down that route [of non-advised] then a lot of consumers don’t understand they have gone down a route without protected regulated advice. Execution-only services can look very much like advice. That is the big difference – you don’t have that redress to the Financial Ombudsman Service.”