FCA to review non-advised drawdown over charges concerns


The FCA is to review pension freedoms advice and non-advised drawdown as part of a raft of studies over the next year.

Speaking at the Institute of Financial Planning’s annual conference in Newport today, FCA senior technical manager Rory Percival set out the regulator’s areas of focus in the pension freedoms space.

He said the FCA is focused on scams, legacy contracts, sales and advice, value for money and decumulation products.

Percival said the regulator will carry out several pieces of work in the new year on non-advised sales and advice.

He said: “On the non-advised side, we will look at whether customers are getting the right information and whether they are making the right decisions based on that information.

“We will also look at whether people are getting suitable advice, which is a market study so quite a big piece of work. Clearly we needed to wait until we were a number of months into the new regime before we could assess that.”

He said the regulator is entering the advice study without “any preconceptions” and aims to gather information to see whether there are any areas of concern.

Percival said the FCA is worried about non-advised drawdown and complex or expensive decumulation products.

He said: “There has been a big move away from annuities to drawdown. There are concerns about non-advised drawdown – that clients are in a drawdown product which needs managing and thinking about, but they have not got an adviser.

“In the decumulation space, there’s concerns that products become more complex and carry higher charges. That would be something we will keep an eye out for and there will be an information request around that.”