On 15 February 2022, the FCA published a statement on funeral plan provider applications.
The FCA will be regulating funeral plan providers from 29 July 2022. This is due to a number of risks that have arose such as, failing to meet consumers’ needs or expectations, using high-pressure sales tactics, poor governance and controls within plan providers, plans going unclaimed due to a failure to inform consumers’ families and poor financial management of trusts.
Ahead of that, the FCA is assessing applications from funeral plan providers for authorisation. The FCA asserts that it will not authorise firms that cannot meet the following standards:
- firms sell products which offer fair value, meet consumer needs and are sold fairly;
- firms are well run, adhere to high conduct standards and have sufficient resources and risk transfer arrangements so they can deliver funeral services; and
- consumers have time and all the information they need to make better informed decisions when choosing between different products and whether a funeral plan is right for them at all.
In addition to this, the FCA is imposing new rules to make sure consumers are properly protected, including banning cold calling and all commission payments to intermediaries to make sure products offer fair value.
Until funeral plan providers are regulated by the FCA, consumers will not be able to make a complaint to the Financial Ombudsman Service, nor will they have protection from the Financial Services Compensation Scheme should their provider go out of business.