It’s been well publicised that, from 29 July 2022, the Financial Conduct Authority (FCA) will be regulating the prepayment funeral plan market. We explore what that actually means for our customers.
- Continuity
Regulation provides continuity for you if the plan provider (such as Golden Charter or Ecclesiastical) fails. Plans can be transferred to different providers on the same terms providing protection and security against potential losses. In the unlikely event a transfer is not possible, rules ensure customers receive compensation from their provider.
- Protection
Where a regulated provider fails, and the Financial Services Compensation Scheme (FSCS) is involved, FCA rules also allow the FSCS to arrange continuity of funeral contracts or pay cash compensation to customers as appropriate.
- Hard Sales Ban
Cold calling will be banned and new standards set out for future advertising to ensure plans are sold fairly. Commission payments to intermediaries, such as funeral directors, will also be banned to ensure products represent fair value.
- Quality Control
Regular checks will be carried out on the fitness of those selling funeral plans, to operate, in order to improve governance standards and oversight.
- Nominated Representatives
Customers will be invited to provide details of a nominated representative to whom the plan provider will write to advising them that a plan has been taken out. This is designed to improve transparency, as some families may be unaware of plans taken out, and to encourage discussion and understanding around choices made.
- Improved Communication
Additional documentation has been designed to build trust and make sure customers are fully informed throughout their purchase journey. Providers will also issue regular transparent statements.
- Guarantees
Regulation guarantees that funeral plans will always deliver a funeral unless the customer dies within two years of taking out the plan, in which case a full refund will be offered. Some providers, such as Golden Charter, will actually reduce this to 12 months. And customers will also receive a guaranteed full refund if they cancel a plan within 30 days of purchase, or pay only a reasonable charge later on.
Early 2022 saw some firms opt out of the funeral plan market and for those that have applied for approval to operate, they were subjected to rigorous assessment against FCA standards. To help existing and future customers, a list of authorised providers will be published on the FCA website from 29 July 2022.
We have already contacted all our plan customers to reassure them their plans are safe and secure. If you want any further information on a current plan, or want a quote for a new plan, we’re available in branch or by phone. It’s worth saying, there’s no such thing as a silly question when it comes to your funeral plans, so we’ll close by reassuring you that we’re here for you when you need planning advice or practical support.
