Robin Geffen, founder and fund manager at Neptune Investment Management, has asked delegates at the FTAdviser Income for All roadshow in Exeter whether their equity income fund is safe.
He told delegates they should question equity income fund managers over their stock picking as in many cases funds which have been chasing high dividend payers may well be concentrating all their risk in one or two stocks.
He called this the "dividend risk" of equity income investing, and urged advisers to pay close attention to where fund managers were getting their yield to avoid exposing clients to dividend risk.
He said: "Dividend risk is the percentage of yield in a portfolio that comes from the top 10 stocks.
"You need to know where the income is coming from, and how concentrated it is."
For example, using data from Morningstar, he showed that 53 per cent of the funds in the equity income universe rely on two oil and gas stocks - BP and Shell - to deliver more than 10 per cent yield.
Moreover, 28 per cent of funds rely on their top 10 to deliver 50 per cent of the yield.
This means not only are most stocks in these portfolios not pulling their weight, but all the risk of dividend growth is coming form just a few companies. The problem is, as Mr Geffen explained, that companies can end up cutting their dividends, or even just doing buybacks instead.
He pointed to the example of Tesco, which saw profits dwindle and cash flow dry up to such an extent that it announced a 75 per cent dividend cut in 2014.
"You may want to have two or three equity income funds in your clients' portfolios for diversification", Mr Geffen said, "But if all three are leaning on the same stocks for yield, then there is no diversification, only a massive risk.
"It suggests many fund managers want to be consensus safe, but I would be very worried if I saw the same top ten stocks in every fund in the portfolio, and it was in these top 10 that the bulk of dividend yield was concentrated."
Mr Geffen also warned against having favourite stocks, adding: "An equity fund manager has to have grit in their soul. They need to be prepared to be selling their best performing stocks, which is a gritty thing to do."