Mike Morrison, Winterthur Life's pensions strategy manager warned that advice to investors on pensions drawdown could become the next IFA mis-selling scandal.

Winterthur is the leading insurance company in Switzerland and one of the top-ten composite insurers in Europe. It operates mainly in Western Europe, as well as in Central and Eastern Europe, the United States of America and Asia.

Morrison was speaking at SIFA's (Society for Independent Financial Advisors) 2006 conference. SIFA is the support group and trade association for solicitor independent financial advisors (IFAs). It provides similar services to accountancy IFAs under the name of sIFAc.

In his speech, Morrison said that people are being encouraged to take unsecured pensions in retirement without sufficient care being taken to ensure the value of their pension is maintained. He warned that many of those people didn't understand the implications of taking tax-free cash without drawing an income.

'I can see a mis-selling scandal if people do not understand what they are getting into,' he said. 'To me income drawdown is all about managing the money so it retains purchasing power.'

'Too many people who take tax-free cash out at age 50 will spend it on what they want and when they are 65 and need income they will come back and say 'why is my pension pot just three-quarters of what I expected?'

'That could be quite a dangerous area for the future.'

Morrison believes that many people will struggle to maintain the value of their retirement savings and that buoyant equity markets are 'hiding many sins'.

He told the conference that the idea of continuing exposure to equity markets and handing on their pension assets to their heirs attracted investors to drawdown.

Morrison saw parallels with companies that encouraged people to 'unlock' their pensions before A-Day by taking tax-free cash. This practice is clamped down on by the Financial Services Authority.

'This is just a grown-up version of pension unlocking,' he added.

The FSA's consumer guidance issued in March 2004 followed industry warnings about advice on pensions unlocking. Information was released to consumers to make sure that they understood the risks of unlocking their retirement fund. Consumers were warned that unlocking pensions was rarely in their long-term interests.