Author Archives: Steve Pett

Response to Funeral Plan Regulation

Response to Funeral Plan Regulation from Stephen Pett of the Funeral Plan Advice Service Ltd info@prepaidfuneralreview.co.uk 01323 740844 2 Hankham Street Hankham Pevensey BN24 5BG

Why Not The FCA?

The worst sector in the market is the non profit guaranteed over 50s plan, which are by far and away the leading providers of so called funeral plans in the market.  As they are already regulated by the FCA and are the main source of consumer detriment in the market*, it makes little sense to allow the FCA to regulate the rest of the market when they have such a poor record of protecting consumers.

In general terms, the FCAs main claims to fame in the consumer market are:

  • Decimating the supply of advice (not just independent advice) in the market to such an extent that they have had to promote non-commercial services to “guide” rather than advise the public who can no longer get advice. Well over 90% of advisers have left the market since 1988, in a wildly more complex era when advice is ever more important.
  • Introducing and promoting Compo Culture to the detriment of public confidence in the industry.
  • Failing totally to lead from the front in terms of ensuring that risk warnings are accurate and consumers understand fully what they are getting when the regulator itself does not.
  • Introducing the new type of multi tied adviser who are neither independent nor tied, just to add to public confusion.
  • Making it very expensive and time consuming to be an advice giver with no certainty that the Financial Ombudsman Service will not decide in 30 years time that the good advice given today was (now) faulty, and getting you thrown out of your care home.

I am sure the FCA do a superb job in high level regulation, but their regulation of the consumer market has done very little to benefit anyone other than it’s many directors and the new industry of claims companies they have generated.

That said, there is a real need for stronger regulation, the key areas being:

  • Regulation of Sales Practices – with consumers often no being aware of terms and conditions before they sign up, and firms relying on their new clients lack of motivation to read the terms and conditions of what they have purchased in time to cancel. The key facts should be clear and simple to understand, and issued BEFORE sale.
  • Clarity on the financial situation of providers, and on their ability to take money out of Trust Funds for expenses or creating millionaires quickly. This should most certainly be reformed so that it becomes possible to compare trust or insurance funds in value and loophole terms.
  • We believe that independent advice should be encouraged, and the chances are that the FCA will take a purist approach and insist that this can only be done by charging fees, rather than a pragmatic approach to allow consumers to get advice from advisers comparing the overwhelming majority of companies who are happy to pay commission. No harm in stopping competition through commission rather than quality of product though!

From a personal point of view, I would expect FCA Regulation to drive us out of business as one of the very few intermediaries trying to offer independent advice, but history makes it clear that regulatory ease is more important than consumer detriment.

Questions

Who offers the guarantees?

Why are so many funeral plan providers £1 or £100 companies?

Why are providers so secretive about their funds and deeds?

  • Should the FCA Regulate the Industry?

I do not believe that the FCA is a competent regulator of public facing services, is far too bureaucratic and expensive.   It currently has no serious understanding of the market, and past experience shows that it regulated from the rear – after things have gone wrong – rather than from the front where it would need to PREVENT things going wrong, requiring some understanding of products.  It just is not their mindset: the PPI issue was common knowledge in 1988 and it took the FCA 20+ years to address it in a wildly inefficient way which created a new industry and compo culture.  All that was needed was to make the PROVIDERS sort it out, so they paid for it rather than the public losing 25% to Claims Management Companies and the industry paying millions for needless highly negative TV campaigns rather have the FCA force the culprits to sort it out.  Common sense is not a strong driver at the FCA.

  • Should advisers be allowed to act as ARs for specific providers?

Should If you just want salespeople, this makes sense, but it is a sector of the market that the FCA has pretty much wiped out in insurance intermediation, and one can only assume their were reasons for this which might apply equally to the funeral plan market. In our case, though we are a small business, that would be unrealistic as we are independent and we would probably, as so many IFAs were, be driven out of business by the regulatory burden.

  • Should Designated Professional Bodies be allowed to exempt firms from regulation?

I have no idea whom the author feels are potential DPBs but the only ones who I can think of who have any understanding of funeral plans are the Society of Will Writers and the Institute of Professional Will Writers.

  • Bespoke Plans

Intermediaries job is to help the consumer get what they want in terms of a plan, but the authority for each plan comes from the funeral plan provider, not the intermediary, unless that intermediary is the funeral director.

  • Should FOS be involved?

You would think so, in that the feedback loop between them and the FCA would improve the market. Sadly, FOS prides itself on having staff who don’t understand the market, and the FCA only wishes to lead from the rear.   A more positive approach to both regulation and market improvement is required, which I believe could be developed far more quickly and cost effectively by the FPA.

  • Near death plans. I believe we may have sold one, and these plans can create major savings. The exemption appears to us to defy logic.
  • See above.
  • Territorial scope. Many funeral plans are sold which may be used in the UK or abroad, and this exemption could potentially allow offshore companies scope to get round any form of regulation by selling plans which could potentially be used in the UK.
  • Statutory Instrument This will achieve the objective if it is to stultify the industry.
  • Impact Assessment Clearly whoever wrote the impact assessment is unfamiliar with FCA pay scales, the amount of paperwork they generate and the amount of work needed to comply with regulations when you are asked the simplest of questions. Extra costs at the FCA with be an absolute minimum of £1m a year, allowing for 1 senior and 5 other staff and expenses, and extra costs for the industry will be a minimum of 10 times that, probably nearer 50. In fact I imagine first year costs at the FCA would be several millions, rising each year. No reference has been made to the difficulty in innovating under a regime which regulates only the past and prides itself on compo after the event rather than prevention before.
  • Books in surplus – clearly, if the contracts are sensible, not a problem.
  • Books in loss – if there are any, the first port of call should be the former owners who may well have milked them
  • Unable to be authorised. Some may not have the staff or finance to cope with the demands of FCA regulation and the consequent need to lay aside funds for future compo claims.

 

 

 

 

 

 

 

 

*Over 50s Plans are non- profit whole of life plans which NEVER have any cash value, except at point of death.  At any other time, if the client misses a couple of premiums, they lose every penny.  It would be interesting to request what proportion of these plans pay out, and I would be surprised if more than one third do.   The rest will predominantly getting back what they have paid in or far less. The FCA sometimes deny regulating these plans, but as they can only be sold by regulated firms, that is a little daft.

Are Prepaid Funeral Plans A Good Idea?

Before we go on to look at the negative aspects of prepaid funeral plans, let us look at a real-life example which happened in 2019 to make it clear that they may well be a good idea, even if not for everyone.

A friends mother died, and they went to their usual undertaker and arranged a funeral. It was just a standard cremation with a ceremony at the crematorium, and it cost £4,790.

He happened to mention it to me, and out of curiosity, I did some research, and it turned out that a fully guaranteed plan using the same funeral director and with exactly the same services would have given a massive saving of £1,655.

So the expectation that prepaid funeral plans are NOT a good idea is not one which should be accepted as a fact. In this case, had the family come to us a couple of weeks before the death, we could have saved a lot of money for them.  Incidentally, you can buy plans for friends or relatives and many providers allow you donate your own plan to a friend or relative.

Let’s get negative and examine the idea that funeral plans are poor value – it does happen.

Sometimes there is a new funeral director in town, offering exceptionally low rates to establish themselves in the area. It is certainly possible they might charge less than the cost of a prepaid plan, at least in the short term.  In some cases, you could cancel the plan and get back most of the original cost, but they are about more than saving money.  They are about simplicity, convenience, and avoiding disputes as the deceased made most of the arrangements

The Daily Mirror gives these reasons why funeral plans are bad value:

Funeral plans might seem like a good idea on paper – but they’re really not great value for money and are often high-pressure sold, which is why they’ve had some bad press lately. Here’s how the plans work:

  • Funeral plans are designed to pay for the costs of your funeral. But there are lots of things that they don’t cover, commonly flowers, headstones – even the burial plot.
  • You pay over instalments or in one lump sum payment. But there are costs for cancelling the policy and for paying by instalments and the policy doesn’t build up interest or insurance like an investment.
  • Funeral plans are a bit like savings clubs – so they aren’t regulated financial products, so you’ve got less consumer protection, though there is a scheme to help if one goes bust.

We certainly agree that some salespeople are high pressure, which is why we have a discussion with clients and POST out a full recommendation with all the information for them to read and act on when they are ready.

Unsurprisingly, funeral plans cover what they say they do, not other things.  Burial plots for example can cost £300 or £15,000 plus.  Burial is a more complex transaction, with headstones not being able to be erected form 6 months plus, and being there for the family rather than the deceased.  Again, even wider variations in cost can happen.

In terms of paying in installments, the extra costs are to provide some cover for the increasing costs over the years.  For a £3000 plan, you would not expect to be able to pay £300 a year over ten years, as the cost of the actual funeral could have doubled in that time, so those who paid in one go would effectively be subsidising the installment payers.

The third point is sort of valid, but client money is either kept in a ring-fenced independently managed and audited fund or with an insurance company which is regulated.  Full regulation is on the way, but is likely to be a double-edged weapon with choice and (our) independent advice becoming much more restricted.

Other disadvantages of prepaid funeral plans:

  1. Most plans have a cancellation charge to cover their costs.  Whilst they do vary rather widely, it should be very unusual to need to cancel a prepaid funeral plan.
  2. If you do cancel, you won’t get back more than you put in.  With the horrible over 50s non-profit plans, the only time you get anything back is when you die, provide the premiums are up to date.
  3. You don’t always get the funeral director you want, but then that one may have been sold long before you need the plans.  Most firms are actually not small private firms anyway, they are shopfronts for the big boys.
  4. It is worth repeating, that a funeral plan cover only the services they say they do – if you want flowers, posh or wicker coffins, headstones etc you need to specifically ask for them.
  5. At the end of the day, never buy a prepaid funeral plan without reading ALL the small print! So call us on 0800 0588 240 or use the enquiry form.

Thinking about Funeral Plans?

We rather liked this from Golden Charter

There is a certain certainty to funeral plans
As a wise person once said, there are only two certainties in life – death and taxes. And if you’re planning on dying at some point in the future, you’ll need a funeral plan .Okay, so that may be a little blunt. But, the fact of the matter is, if you really want to help your clients prepare for the future, a funeral plan is less of a luxury and more of a certainty.

It might be a little awkward to bring the subject of death up in conversation, but no more so than with selling life cover or writing a will. But you appreciate that sometimes talking about awkward things now can have significant benefits for your clients further down the line.

And, let’s face it, while some clients will never need to make a life cover claim, a funeral plan is pretty much guaranteed to come in handy one day. We can give you all the support and tools you need to raise the topic with your clients – and your clients (and their families) will thank you for putting some financial security in place for when the time comes.

Top Funeral Music Some Ideas To Consider

Top Funeral Music – What is Top of The Pops?

What is top funeral music these days? Pop music has become the soundtrack to peoples’ lives – and now deaths.  Over 66% of today’s funerals are accompanied by pop music says research by The Co-operative Funeralcare, the UK’s biggest chain of funeral directors.

Just one in twenty five asked for classical music.

Frank Sinatra’s “My Way” remains top of the funeral pops, the longest running number 1 by holding on to the number one spot for 7 years. Only in 2002 did Bette Midler edge ahead briefly with “Wind Beneath My Wings.”

The research shows a steady decline in singing or even playing hymns at funerals: seven years ago, hymns were over forty per cent of all funeral music but this year they have fallen below thirty per cent.

Top of the Hymns was “Abide With Me.”

The favourite classical piece was “Nimrod” by Elgar.

Most funerals featured sombre or emotive music, but a more humorous approach is becoming popular with Eric Idle’s “Always Look on the Bright Side of Life” at number 13 in the pop funeral charts.  It’s even more popular regionally, reaching number six in the South East and the North East, and number nine in London.

The  Ying Tong Song by Spike Milligan, whose engraved headstone famously reads “I Told You I Was Ill,” featured at several funerals.

Less conventional requests included Lady Gaga’s Bad Romance, Smoke Gets in Your Eyes, and the clock from Channel Four’s Countdown marking the seconds as the curtains closed at the crematorium.  Variety is not just the spice of life it seems wehn it comes to top funeral music.

Lorinda Robinson, Head of Marketing, The Co-operative Funeralcare, said: “Hymns were once the mainstay of a funeral service but pop music plays such an important part in people’s lives that it now acts as the theme tune to their passing. Modern funerals are very much about personal choice, and this is often reflected in the choice of music.

“Song lyrics now provide the poignant words to remember a loved one’s life, either to acknowledge how much they were loved and will be missed or as a reminder of their favourite hobby, pastime or humour.”

Key findings:

• My Way becomes the UK’s longest running number one song – as requested at 15 per cent of funerals – while six of Sinatra’s hits feature in the charts, making him the most popular artist of all.
• A quarter of funeral homes have had to refuse to play a piece of music on the grounds of taste, usually because clergy conducting the ceremony feel the choice is inappropriate. An example is John Lennon’s Imagine which features the line ‘Imagine there’s no heaven.”
• Bette Midler’s Wind Beneath My Wings continues a slow slide down the charts from number one in 2002, to number two in 2005 and 2009 but down to number three in 2012.
• Adele’s worldwide chart success sees her enter the funeral music charts at number 22 with Someone Like You while there is no place for Take That in the top 30.
• A third of funeral homes have received unusual or quirky requests, including the theme tune to Countdown.
• Over half (53%) of funeral homes have been asked for live music, ranging from pipers and choirs to steel bands and rock groups. This is up from 39 per cent in 2009.

Top ten contemporary songs
1. My Way – Frank Sinatra
2. Time To Say Goodbye – Sarah Brightman/Andrea Bocelli
3. Wind Beneath My Wings – Bette Midler
4. Over the Rainbow – Eva Cassidy
5. Angels – Robbie Williams
6. You Raise Me Up – Westlife
7. You’ll Never Walk Alone – Gerry & the Pacemakers
8. We’ll Meet Again – Vera Lynn
9. My Heart Will Go On – Celine Dion
10. Unforgettable – Nat King Cole

I Will Always Love You by Whitney Houston and Dolly Parton have dropped out of the top ten since 2009, replaced by We’ll Meet Again.

Top ten hymns
1. Abide with Me
2. The Lord is my Shepherd
3. All Things Bright and Beautiful
4. The Old Rugged Cross
5. How Great Thou Art
6. Amazing Grace
7. Jerusalem
8. Morning Has Broken
9. The Day Thou Gavest Lord Has Ended
10. Make Me a Channel of Your Peace

The Lord is My Shepherd has been replaced by Abide With Me at the top of the charts.

Top ten pieces of classical music
1. Nimrod – Elgar
2. Canon in D – Pachelbel
3. Ave Maria – Schubert
4. Nessun Dorma – Puccini
5. Pie Jesu – Faure
6. The Four Seasons – Vivaldi
7. Adagio – Albinoni/Bizet
8. Air on a G String – Bach
9. Largo – Handel
10. Clare de Lune – Debussy

Jesu Joy of Mans Desiring (Bach) and Going Home from Dvorak’s New World Symphony have been replaced in the top ten by Clare de Lune and Adagio.

The most popular TV theme tunes were:
Match of the Day
Pot Black
One Foot in the Grave
Last of the Summer Wine
Dr Who
The X Files
Red Dwarf
Top Gear
Six Feet Under
The Muppets Theme Tune – It’s Time to Face the Music

More top funeral music.

Top Funeral Music

Safe Hands Funeral Plans Now FPA Members

Safe Hands Official Statement Regarding Funeral Planning Authority Registration.
We at Safe Hands are delighted to announce that our application to become registered with the Funeral Planning Authority has been successful.

The FPA registration process we found to be reassuringly thorough and robust, involving, as it did, a forensic level of scrutiny of all aspects of our operation by the Compliance Committee, and the making of some modifications and changes operationally in order to satisfy the FPA’s exacting standards of qualification.

Over the coming days, we will be revising our marketing literature, website and other platforms, to include the FPA’s logo as confirmation of our registration.

FPA Regulated Firms

We expect the news, that Safe Hands Funeral Plans are now registered with the FPA, will be as welcome to those of you that sell our products as it was to us as a company. All of you that have secured sales for us have, by selling responsibly, honestly and in a manner compliant with our rules of operation, contributed to the success of our application. We are extremely grateful to you for your efforts.

We ask, now we are registered with the FPA, that we all continue to work together to maintain the high standards that we have achieved, and in a manner that is in keeping with the somewhat unique, particularly sensitive, environment in which we operate.

Yours faithfully,

David Latham
Managing Director