The Financial Conduct Authority (FCA) has named the providers it intends to authorise when the pre-paid funeral plans industry comes under its regulation from 29 July.
Of the 64 funeral plan providers in the market, only 24 have been approved for authorisation so far, however the FCA said these firms hold approximately 87% of existing customer plans.
The regulator said it was still assessing a small number of providers’ applications and would give an update on these as soon as possible.
Until regulation comes into force, all of the providers in this market remain unregulated, meaning that customers do not have access to the Financial Services Compensation Scheme (FSCS), and the FCA has limited powers.
The regulator added it continues to work with the industry to find longer-term solutions for customers of providers which have not applied for authorisation or have withdrawn.
From 29 July, all funeral plan providers will need to follow new FCA rules, which include a ban on cold calling and commission paid to intermediaries, and high standards on governance and financial resilience.
Funeral plan holders will be able to refer complaints about a firm to the ombudsman and will be covered by the FSCS if their provider goes out of business.
Emily Shepperd, executive director of authorisations at the FCA, said: “As this sector approaches regulation, we want to provide holders of pre-paid funeral plans with some reassurance, which is why we have published a list of the firms we intend to authorise.
“Our regulation will lead to higher standards in the market and boost consumer protection. We want to see an improvement in the way customers are treated, with better value products, better sales practices and better controls in place so consumers can be confident they will receive the funeral they expect.”
Wait to buy
Hargreaves Lansdown senior personal finance analyst, Sarah Coles said for customers considering buying a plan, it may well be worth waiting until the FCA begins authorising the sector from 29 July and then picking an authorised fund.
“That way you can be certain of its status, and the protection it gives you,” Coles said.
“If you already have a plan with any of the firms the FCA hasn’t confirmed it is intending to authorise, get in touch to ask what’s going on. Check whether they intend to apply for authorisation, and ask whether they can still deliver on your plan. It’s also worth asking what your options are – in writing – and checking when you can expect to hear from them.
“If you’re worried about the future of the firm, you may be able to cancel your plan and ask for your money back. However, there may well be a cancellation fee, and you may get back less than you paid in, so check your contract to see what you will lose before you make a decision whether or not to cancel.”
Coles added firms on the list of those who have agreed to transfer customers to another provider should have heard from them by now.
“If you haven’t, get in touch as soon as possible. If the plans are transferred to an authorised provider you may well get the service you’re expecting, but it’s worth making sure this is actually in progress.
“If you were sold the plan by a funeral director that’s not on any of the lists, check your paperwork and see who is administering it. If you can’t find any documents, get in touch with whoever sold you the plan.”
Commenting on his firm’s impending authorisation, Charles Rogers, chief executive of Plan with Grace, said: “We’re delighted that the FCA intends to authorise us. We’ve argued for many years that the funeral plan industry is long overdue for regulation and this is great news for all our customers and partners.
“We believe that FCA regulation will provide the peace of mind that our customers need when purchasing a funeral plan.”
The firms the FCA plans to authorise are:
Alternative Planning Company Limited
Avalon (Europe) Limited
Avalon Trustee Company Limited
Celebration Of Life Planning Ltd
Central England Co-Operative Limited
Co-Op Funeral Plans Limited
Crystal Cremations Ltd
Dignity Funerals Limited
Distinct Funeral Plans Limited
Ecclesiastical Planning Services Limited
F A Albin & Sons Limited
Family Funerals Trust Limited
Freeman Brothers (this includes Peter Christopher Freeman and Bridgid Mary Freeman)
Golden Charter Limited
Golden Leaves Limited
Haven Personal Funeral Plans Ltd
Independent Funeral Planning Services Ltd
Low Cost Funeral Limited T/A Affordable Funerals (this includes Memoria Limited)
Peace Burials Limited
Plan With Grace Limited
Pure Cremation Planning Ltd
Southern Co-Operative Funerals Limited
The Independent Family Funeral Directors Ltd (this includes Fosters Family Funeral Directors)
William Alty & Sons Limited