The Financial Conduct Authority (FCA) is showing signals it will look at the sustainability of drawdown plans, according to Just Retirement.
Speaking at Sifa’s annual conference, Just Retirement business development head Jan Holt said that the company had, among the many pensions communications put out by the FCA about the pension the freedoms, seen indications the FCAwas concerned about drawdown sustainability. She said IFAs needed to get ahead of the curve.
‘The regulator has put out a series of documents about the world of retirement. They are all quite hefty, I think they average around 99 pages so you can be forgiven for not examining every page of every one.
‘We think that what looms large is a real focus on sustainability.’
Holt pointed to a FCA rulebook change last yearthat forced advisers to give specific risk warnings over drawdown, even at low withdrawal rates, that their pots might run out. She said this was as a ‘clear idea’ of the regulator’s intentions,
‘Its a clear idea as to where the regulator is going to be focusing,’ she said. ‘They are going to give a real view on what sorts of plans and processes are being put into place to help people make sure their retirement plans are sustainable.’
Source: New Model Adviser