Hargreaves Lansdown has hit out at the “patronising and wrong” Financial Services Consumer Panel for raising the alarm about non-advised drawdown sales.
At the Taxation of Pensions Bill committee hearings this week, FSCP member Teresa Fritz warned MPs that using drawdown without advice from next April is a “big area of concern”.
Fritz said there was a danger consumers would mistakenly believe they had taken advice and have no recourse for redress over inappropriate product choices.
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.”
Hargreaves Lansdown already offers non-advised drawdown. Head of pensions research Tom McPhail says the FSCP position is “simplistic”, “patronising” and “very counter-productive”.
He says: “There is a risk about sweeping generalisations. I did not recognize the FSCP’s characterisation of drawdown as a complex product that should only be sold with advice. Its presumption that no one is clever enough to look after their own money is both patronising and wrong.
“At one level it is no different to drawing money out of an Isa. I worry the FSCP fundamentally does not understand this market by making these comments. The FCA position is much more measured and considered.”
At the same parliamentary session the FCA said drawdown was “unlikley to be suitable” for pension pots under £50,000 but recognised the market would evolve.