The FCA is homing in on income drawdown products as it kicks off its thematic review into advisers’ due diligence.
The regulator has sent an information request to a number of advice firms ahead of site visits.
In its 2014/15 business plan, the FCA announced it would be carrying out a thematic review on “effective due diligence for retail investment advice”.
Money Marketing later revealed this would include the level of due diligence advisers carry out when choosing a platform.
The review was subsequently delayed but has now been resumed.
The information request, seen by Money Marketing, asks for details of advisers’ due diligence on: income drawdown products, collective investment schemes, platforms and discretionary investment managers.
The FCA asks firms to include details of any tools or third parties used, the criteria applied to select or exclude certain products and services, and any additional research undertaken on shortlisted providers, products or services.
Threesixty Services managing director Phil Young says: “There has been a lot of noise around the development of new income drawdown products. The FCA wants to ensure advisers fully understand how these products work and their risks.
“Advisers need to demonstrate they have carried out sufficiently broad research on the products available in the market, as well as checking that the product they have selected does what it says on the tin.”