The Gold Standard is a set of nine principles for advisers and a consumer guide. It was launched in April 2019 by the Pensions Advice Taskforce with the aim of boosting the standard of pension transfer advice.
The Gold Standard consumer guide explains to pension savers what to expect from a regulated financial adviser.
Despite the success of the standard advisers are quitting the pension transfer market in droves due to the difficulty in finding professional indemnity insurance and regulatory pressure.
About 50 firms have so far surrendered their Pension Transfer Gold Standard accreditation.
Keith Richards, chief executive of the Personal Finance Society and chair of the Pension Advice Taskforce, said the number of advisers supporting the standard overall was to be welcomed and was a positive step to giving consumers a better service.
However, Mr Richards warned that while financial advisers were continuing to sign-up to the standard over the last 12 months, a significant number were unlikely to re-register this year due to problems in obtaining affordable professional indemnity insurance.
The cost of this alone would force many to pull out of the pension transfer advice market but other factors were also evident.
Mr Richards said: “The hardening of the professional indemnity insurance market, and the prohibitive cost this has imposed on advisers, has meant some members dropped their permissions to advise on defined benefit pension transfers and come off the Gold Standard register.
“Undoubtedly, the Coronavirus will have a further impact on advice businesses and access, meaning that further government attention needs to be given to Pension Freedom legislation. The significant falls in equity values make it both more expensive for trustees to fund transfers and more challenging for consumers to invest transferred funds – these factors are likely to significantly reduce demand for both advice and transfers.
“It is vital that the public can access affordable financial advice as highlighted in the government and FCA’s joint Financial Advice Market Review (FAMR) and we have called for urgent prioritisation in creating a fairer system of funding consumer protection, to include public financial awareness, engagement and protection.
He added: “A more effective and sustainable solution for Savings and Investment Monetary Protection and Education Levy can be achieved by pooling the cost at the highest level funds under management. This would mean the entire investment sector would spread the cost of just a few basis points, pooled with sector fixed levy contribution’s to create a sustainable solution which would negate the need for PII also help to protect against the increasing scourge of scammers.”