Pre-paid funeral plan: 6 months post-regulation, what have we learned?

Freeman Brothers has been established as a Funeral Directors in West Sussex since 1855, and has been selling prepaid funeral plans since they were introduced to the UK in the 1990s. Six months ago, funeral plans in the UK became regulated by the Financial Conduct Authority, putting them on an equivalent footing to other financial […]

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Freeman Brothers has been established as a Funeral Directors in West Sussex since 1855, and has been selling prepaid funeral plans since they were introduced to the UK in the 1990s. Six months ago, funeral plans in the UK became regulated by the Financial Conduct Authority, putting them on an equivalent footing to other financial products such as mortgages and insurances.

Here, Freeman Brothers’ Manager, Abi Pattenden – who has a responsibility for compliance under the new regulatory regime – talks about what has changed, and what has stayed the same, for our prepaid funeral plans in the past six months.

Freeman Brothers has been providing prepaid funeral plans as part of its services since they became available in the UK, but one of the main ways that regulation has changed things is how funeral directors generally fit into the way plans are sold. Plan providers- who actually operate the plans, and are responsible for (among other things) ensuring the money is safely invested for the time when the planholder dies – may sell plans themselves (which is called being ‘directly authorised’), but now can also have ‘appointed representatives’ (ARs) to sell plans on their behalf. Freeman Brothers’ first decision was whether to apply for direct authorisation, to enable us to continue selling our own plan, or whether to become an AR for a larger company. Many funeral directors were already working to a version of this latter model. However, having decided that we would apply to be directly authorised, and having been successful in this, we are now termed a ‘plan provider’ and are held to the same scrutiny as the largest equivalent companies – one of the key aims of regulation is to ensure consistent standards across firms offering products of similar types.

One of the key changes we have noticed as a provider has been in the formalising of our CPD (Continuing Professional Development) programme. All of our team were always very well-trained and understood all of the details of the plans, but there is now a requirement for all of us to have at least 15 hours’ CPD a year. We had always dealt with training needs as they arose, and usually with an individual (before taking the learning out to the whole team), but we now need to ensure that everyone who might speak to a customer about a plan is equipped with all kinds of information – for example, two weeks ago, we held a session about Money Laundering – how it can be recognised and prevented, and the company’s responsibilities in this area.

Even without the rules about CPD, plenty of training was necessary on all of our new literature and the new procedures that being authorised has meant putting into place. One such item is the Plan Summary document which every planholder receives at inception. They will also receive a Plan Statement every three years. These documents are proscribed in format and are brand new, so it’s important that the team understands exactly what our customers will see and why. Some of our processes had to alter to run in line with legal requirements – for example, if we were to receive a complaint about the prepaid funeral plan, there are timelines for investigating it and rules about the type of correspondence which has to be sent at each stage in the process.

One thing that was very important to us when we were deciding whether to become directly authorised was that we could still continue to offer prepaid plans in the way we always have – we have always aimed to offer a range of tiers, priced in line with the same at-need funeral at the time of purchase, and a tailormade option for customers whose requirements sit outside those. We continue to offer this range of options and one thing that hasn’t changed since regulation is our approach to customer service. We will never pressure a prospective customer or offer our opinion on what is best for them. We let customers make decisions at their own pace, giving them as much information as they need to ensure they decide whether our prepaid funeral plan is the right choice. Prepaid funeral plans aren’t suitable for everyone, and the products offered by Freeman Brothers may not meet requirements as well as those of another provider. Therefore, we will always ensure the information we give is clear and enables easy comparisons between different offerings to help prospective customers in their decision-making.

Another important consideration from us around the authorisation process was the financial side of the plan. Previously, all of our planholders’ money had been invested in Trust, and it was very important to us that we would be able to continue to do this. The safety of customers’ money has always been of the utmost importance to Freeman Brothers. As it transpired, plans backed by either a Trust or insurance continue to be allowed, and we continue to take investment advice from experts and have the funds regularly assessed by an actuary to ensure the Trust’s solvency. One difference is that we are now required to publish a report outlining this position – it is called a ‘Solvency Assessment Report’ (SAR) and can be found here, together with lots of other information about our plans.

For more information about our prepaid funeral plans, you can visit this page of our website, email funeralplans@freemanbrothers.co.uk or phone or call into one of our offices, whose details you can find here.

Freeman Brothers is authorised by the Financial Conduct Authority for the sale of prepaid funeral plans. FCA Registered Number: 962064

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Written by Abi Pattenden

Manager

February 1, 2023

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