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Investors transferring Sipps must be aware of possible penalties in the transfer process, a senior pensions figure has urged while expressing fears of a future mis-selling scandal.

Mike Morrison, pensions strategy manager for Winterthur Life, said consumers must take advice when moving money from protected rights as fees may be involved.

He said: "The markets are down and this could result in fees and charges that investors may not be aware of.

"People must take proper advice and check that it is actually worth transferring protected rights across into a Sipp. It is not the answer for everything."

Mr Morrison is currently the chair of the Association of Member Directed Pension Planning Schemes and he confirmed this area was one of growing concern for him.

He said: "Sipps are good products but they are not for everybody and we are concerned this could become a mis-selling scandal.

"This is something I am looking at as consumers with a protected rights fund of £40,000 may be better off moving money across into personal pension."

Speaking about pension products on the market, Mr Morrison said there needed to be more solutions which worked on a flexible basis and around the ever changing circumstances of a client.

He said: "You cannot just have a product that does not offer a flexibility. I have been talking to IFAs about this and, although we have some acknowledgement of this at higher levels, we need to get this on the ground and on a structured basis."

Referring to the consolidation between Axa and Winterthur, Mr Morrison said the aim was to take the best of both models and confirmed IFAs would remain at the heart of the business.

He said: "As with all things we are looking to embed the process. However, we also want to look at our offering, which includes examining third way annuities and looking at putting guarantees on our drawdown products.

"Of course, some of these are new to Britain but we must continue to examine solutions to pensions in the future.

"Providers have a role to play but advice will be at the heart of this as people need to have access to education and information in order to break the blase attitude that seems to exist when it comes to planning our life in retirement."