Under a new regulatory regime, funeral plan providers will need to register with the FCA and will be subject to a range of new rules including
- funeral instalment plan products will always deliver a funeral (after a moratorium period) as we will be banning those that don’t guarantee this
- cold calling will be banned and new standards on advertising will be implemented to ensure plans are sold fairly
- commission payments to intermediaries will be banned to ensure products represent fair value
- those selling funeral plans are subject to full checks on their fitness to operate to improve governance standards and oversight
On Monday, Sheldon Mills, Executive Director, Consumers and Competition at the FCA said the new rules would provide “customers with comfort and certainty that their affairs are in order.”
Industry commentators have praised the move to regulate the funeral planning market and the protections for consumers.
Trevor Worth, founder and CEO at Portcullis Legals said
“The drive towards regulation of the sector is most welcome. Although it brings costs and challenges to the way the products are marketed and processed, if it protects the consumer from unscrupulous individuals and bad practice that has to be a positive surely? It is good to see the funeral planning sector brought in line.”
Matt Morgan, Head of Funerals at Farewill called for greater and more affordable choice for consumers
“For too long, consumers have been tripped up by surprise charges, so we welcome the news that the CMA are clamping down on funeral providers who are not completely transparent with their costs. Organising a funeral should be as hassle-free for people as possible, so of course, receiving hidden charges from a provider is going to put undue stress on people who should be focusing on grieving for their loved ones. This decision is a huge step in the right direction, and we hope it leads to funerals being more affordable and much easier to navigate.
However, the industry is changing and national providers can (and should) offer better choice, more affordable modern funerals. For decades, the processes surrounding dealing with death have been the same, and people often end up having a traditional, expensive service, because there’s low awareness around other, more customisable options. We’re keen to see more support for national, online-focused providers in the near future.”
And for Worth, who is Vice Chair of the Institute of Professional Willwriters, regulation of funeral plans should be the next step on the road to regulation for willwriters.
“My one fear is that those who market funeral plans now will just migrate to the unregulated wills sector as there is no barrier to entry and the same level of malpractice will continue with no one to answer to
Whilst most estate planners I know would welcome regulation of the Willwriting sector despite the associated burdens that would bring, it would also give greater clarity and protection to the consumer who are currently dealing in some cases with a Wild West approach to who they choose to provide that advice
You only have to look on LinkedIn to see the number of experts that have attended a one day course but are now extolling the virtues of their expertise on trusts despite having no experience and no professional qualifications.”