Scottish Widows head of pension market development Ian Naismith says advisers should be cautious about recommending flexible drawdown until the FSA issues guidance on best practice.
Speaking at a Widows adviser conference in London last week, Naismith praised the Government for taking the “simple route” in its reform programme, including proposals to end compulsory annuitisation at age 75.
However, he accused policymakers of “rushing through” flexible drawdown changes which will allow investors to access up to 100 per cent of their pension pot, above the minimum income requirement of £20,000, from April 6. He said: “We have a Government in a hurry and that applies to a raft of pension changes. The age 75 reforms have been rushed thr-ough and providers cannot produce flexible drawdown products ahead of the deadline.
“I would urge caution on flexible drawdown at the moment. There is not enough guidance on how to use it.”
Annuity Direct chief executive Bob Bullivant says: “I think Ian Naismith has hit the nail on the head but it is for the advisory community to work out what best practice is.
“I am very critical of all the professional bodies because where are the practice standards? Where is the practice guidance? Someone, somewhere needs to take some leadership but I am not sure we should be sitting on our hands waiting for the FSA.”
An FSA spokesman says the guidance contained in the FSA handbook is adequate. He says that the regulator sought views on whether additional guidance is needed in its Jan- uary consultation on changes to the Cobs rules, which has now closed.
Scottish Widows, Standard Life, Aegon and Prudential will not be offering flexible drawdown pension products when the changes come in on April 6.