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PIA plans early swoop on drawdown brokers

PIA monitoring hit squads could swoop on IFAs writing income-drawdown business as early as next month in a bid to clean up the market.

The idea has sparked fears that the PIA will take a confrontational approach towards IFAs selling drawdown to clamp down on possible misselling.

The PIA last week finished a survey of 30 life offices operating in the drawdown market.

The regulator is now set to turn its attention to IFAs and will focus on firms known to have written large volumes of income-drawdown business.

PIA head of market practice Richard Cockroft is understood to be considering sending teams into IFA firms as early as March after reviewing life-office replies to the survey.

The PIA refuses to comment on the details of the visits but admits that they could become part of regular monitoring checks.

It has not made any decision on making drawdown a permitted activity despite pressure from some life offices, such as Winterthur Life.

But the PIA is now believed to favour new guidelines and tighter continuing professional development instead of extra exams.

The regulator is also understood to be considering increasing training requirements for IFAs advising on drawdown. IFAs could be banned from advising on income drawdown unless they have the correct number of CPD points in areas such as investment strategies and critical-yield analysis.

The PIA hopes to release a consultation paper on its drawdown proposals in May.

Informed Choice director Nick Bamford says: "If they come at it from how IFAs are presenting drawdown and then come to conclusions, then this is a grown-up approach. The fear is it is going after people. What is behind this?"

Carrington Investment Consultants consultant Paul Tinslay says: "Nobody likes anybody sniffing around their office. It is a difficult thing to breach but the compliance visit should be a two-way thing to help each other."

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