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funeral plans 2019

Funeral Planning Authority Code of Practice

CODE OF PRACTICE from 1st January 2020.

 (Note – the FCA will take over the Regulation of Funeral Plans fairly soon)

The Funeral Planning Authority (“the FPA”) is the independent body governing registered pre-paid funeral providers. It aims to ensure that:


  • funeral plan providers that are registered with the FPA (“Plan Providers”) maintain high standards of professional conduct; and


  • the money that customers pay to a Plan Provider for a funeral plan is safeguarded so that, when the time comes, their funeral will be provided in accordance with that


The FPA does this by:


  • setting principles for business that govern operations and practices;


  • setting stringent minimum requirements for any provider to become an FPA registered provider and to maintain that status;


  • having fit and proper controllers of Plan Providers and plan trustees;


  • setting rules and standards within which Plan Providers must operate;


  • monitoring the activities and outputs of Plan Providers;


  • enforcing rules and guidance where necessary;


  • making a Pledge to Customers that, in the unlikely event of a Plan Provider becoming insolvent, the other Plan Providers shall co-operate and examine ways in which the FPA might assist in arranging delivery of the funeral of the customers of the insolvent Plan It should be noted this Pledge does not extend to providers that are not registered with the FPA.


The FPA’s Rules require the Plan Providers to comply with this Code of Practice and they may be liable to disciplinary action if they fail to do so.




The Code operates to ensure that Plan Providers act in line with high-level principles for business as follows:


  • Integrity


A Plan Provider must conduct its business with integrity.


  • Skill, care and diligence


A Plan Provider must conduct its business with due skill, care and diligence.


  • Management and control


A Plan Provider must take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems.


  • Financial prudence


A Plan Provider must maintain adequate financial resources.


  • Market conduct


A Plan Provider must observe proper standards of market conduct.


  • Customers’ interests


A Plan Provider must pay due regard to the interests of its customers and treat them fairly.


  • Communication with clients


A Plan Provider must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading.


  • Conflicts of interest


A Plan Provider must manage conflicts of interest fairly, both between itself and its customers and between a customer and another client.


  • Customers relationships of trust


A Plan Provider must take reasonable care to ensure the suitability of its advice and discretionary decisions it makes for any customer who is entitled to rely upon its judgment.


  • Clients’ assets


A Plan Provider must arrange adequate protection for clients’ assets when it is responsible for them.


  • Relations with regulators


A Plan Provider must deal with its regulators in an open and cooperative way, and must disclose to the appropriate regulator appropriately anything relating to the Plan Provider of which that regulator would reasonably expect notice.


2.                  CONDUCT


Plan Providers, including their staff and their agents’ representatives:


  • Must act in a courteous, sensitive, dignified and professional manner and, in particular, must not significantly impair potential customers’ freedom of choice by the use of harassment, coercion or undue influence that is likely to cause them to take a different decision to buy a funeral plan.


  • Must not make unsolicited visits, unsolicited telephone calls, undertake unsolicited direct mailing electronically or otherwise, or door to door canvassing. General leaflet drops or media inserts are not specifically precluded by this clause though Plan Providers should consider how these fit in any particular circumstance with the principles for business. In particular, Plan Providers must ensure specific care is taken in respect of residents of nursing homes, residential care homes or similar establishments and any other vulnerable customers; (see section 3 TCF).


  • Must have appropriate policies, processes and oversight to identify and deal with vulnerable customers (see 2) in a manner that does not expose them to the potential or actual detriment.


  • Must respect the confidential nature of the information given to them and only use that information for its proper


  • In recommending another business, must disclose any interest they may have in that


  • Must not make misleading comments about the quality or appropriateness of any funeral plan which a customer has already purchased or is thinking of As defined by the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) which specifically refers to unfair commercial practices, misleading actions and omissions.


  • Must maintain comprehensive records of all interactions with customers to the extent allowed by Data Protection Regulations.


  • Must take every reasonable step to ensure that they or their agents do not undertake any activity that risks bringing the sector into They must also take reasonable steps to notify the FPA of any such activity that comes to their attention.


  • From time to time the FPA may issue guidance to support the FPA Rules and/or Code of Plan Providers are required to follow that guidance or have documented reasons for not doing so formally agreed by their governing body.




  • Plan Providers must pay due regard to the interests of their customers and treat them fairly by ensuring that:


  • Customers feel confident that they are dealing with a Plan Provider where the fair treatment of customers is central to its culture.


  • Products and services marketed and sold are designed to meet the needs of customers.


  • Customers are provided with clear information and are kept appropriately informed before, during and after point of sale.


  • Where customers receive advice, the advice is suitable and takes account of their circumstances.


  • Customers are provided with products and associated services that perform and are of the standard as Plan Providers have led them to expect.


  • Customers do not face unreasonable post-sales barriers imposed by Plan Providers to change a plan, redeem or cancel a plan or make a


3.2 Vulnerable customers are those who, due to their personal circumstances, are            especially susceptible to detriment, particularly when a firm is not acting with            appropriate levels of Appendix 1 provides guidance on factors the FPA believes           should be considered when assessing whether a customer is or may be              vulnerable.


3.3 A Plan Provider must have a written policy that sets out how they will identify and treat vulnerable


3.4 Plan Providers will take the necessary steps to identify vulnerable customers or customers in vulnerable This will include ensuring all employees, agents or representative operating on the PlanProvider’s behalf are trained in the Plan Provider’s vulnerable customer policy. The consideration of funeral arrangements can, obviously, often arise at very difficult times. Plan Providers should be sensitive to this and take account of any other factors that might affect decisions to take out a plan or choose a funeral.


3.5 Plan Providers will make the necessary effort and time to ensure that vulnerable customers understand all aspects of signing a contract for a funeral Where appropriate, Plan Providers must suggest the involvement of a trusted friend or relative.


3.6 Plan Providers are prohibited from generating sales enquires or new orders from the creation, obtaining, distribution, maintenance or use of lists of specific customers that are susceptible to responding to cold calling approaches (sucker lists).


3.7 Where a Plan Provider undertakes a home visit for the sale of a funeral plan, the representative must leave immediately if requested to do so or if it becomes apparent that the customer is not interested in the goods or services the business is


3.8 Customers must be provided with a written cancellation This notice must inform customers of their right to cancel within 30 days or more of the date the customer received such notice without any cancellation or other fee being applied. This condition applies irrespective of the way the plan was sold.





4.1 Plan Providers must ensure that any marketing or advertising which they undertake does not bring the funeral planning industry into disrepute and that their marketing and advertising:


  • is legal, accurate and, as a minimum, complies with all the other requirements of the British Code of Advertising Practice or other relevant Code of Practice and wider requirements of the Unfair Trading Regulations 2008;


  • complies with the Principle set out in 7;


  • only contains genuine customer endorsements which have been specifically approved by that customer;


  • only contains third party endorsements or sponsorship which have been specifically approved by that third party; and


  • makes no unsubstantiated claims about funeral plans or services provided by


4.2 Plan Providers must provide their employees, agents and representatives with training and written guidance on sales practices, which ensures that potential customers are given sufficient information before entering into a contract to make informed decisions about buying a funeral plan.


5.                  INFORMATION


5.1 Plan Providers must provide potential customers with written pre- contractual details of any funeral plan being offered, which clearly sets out the following in writing, irrespective of the preferred medium, electronic or hard copies:


  • 5.1.1 Information about the main characteristics of the service to be provided in the funeral


  • 5.1.2 The type and cost of funerals and other services which can be provided under the funeral plan including what is specifically included by each plan


  • 5.1.3 Pricing information showing the total price and a breakdown where appropriate, it must show VAT, administration charges, any instalment charges and any other costed items whether optional or


  • 5.1.4 Clear and transparent disclosure on what is not covered by the funeral plan and the potential for the family or estate to pay further amounts at time of This specifically relates to exclusions, these must not only be referred to in the footnotes.


  • 5.1.5 If the plan is paid for by instalments, what happens if someone dies before all payments have been


  • 5.1.6  If the plan is a fixed monthly payment insurance based plan details of when contributions are paid and when they cease and either:


  • the maximum total contributions that could be paid over the plan duration;




  • customer’s age at which contributions paid would equalthe current price of the equivalent


Details  of  any  moratorium  period  should  also  be  stated explicitly.


  • 5.1.7 The customer’s right to a full refund if the plan is cancelled within 30 days of its commencement (see Clause 8) and any rights to a refund which the customer has if the plan is cancelled by the customer after that time. This should include prominent reference to any cancellation charge that applies, any restrictions on receiving a refund and where no refund is available confirmation of that fact.


  • 5.1.8 What happens if the Plan Provider cannot meet its obligations under the plan.


  • 5.1.9 Details of the portability of the plan between different funeral directors, before and after the death of the planholder.


  • 5.1.10 How a customer may complain about the Plan Provider or any plan provided and how such complaints will be This should also include details of the option for the customer to refer a complaint to the FPA if dissatisfied.


  • 5.1.11 Provide details of the Plan Provider’s name, postal address and contact points.


  • 5.1.12 The other terms and conditions which apply to the plan.


  • 5.1.13 The fact that the Plan Provider is registered with the Funeral Planning Authority.


6.                  CONTRACTS AND DOCUMENTS


  • 6.1 Plan Providers must give every person who buys a funeral plan a written document, electronic or hard copy, which sets out the plan’s terms and conditions, the specification of the funeral to be provided and how the funeral plan may be amended or cancelled.


  • 6.2 Plan Providers must give every person who buys a funeral plan an electronic or hard copy of the customer’s membership card or certificate of A Plan Provider must replace a lost card or certificate once free of charge but may charge a reasonable fee for providing any further replacement cards or certificates.


  • 6.3 As part of the material provided to the planholder there should be a plan summary and a key features document that sets out the services covered by the plan and those that are This may form part of other documents but should be accessible to customers both in terms of format and content.


  • 6.4 Plan Providers must ensure that every person who buys a funeral plan is given guidance on either how to register a death or the key contacts needed to begin the process of


7.                  PLAN FUNDS


  • 7.1. Plan Providers must comply with the FPA’s Rules relating to the security of the plan In particular, those Rules require Plan Providers to either:


  • 7.1.1 Pay money received for funeral plans, as soon as practicable, into an account maintained by trustees (the majority of whom must be unconnected with the Plan Provider) who have been approved by the FPA.


  • 7.1.2 Have the funds invested by an independent fund manager who is authorised under the Financial Services and Markets Act


  • 7.1.3 Have the trust funds audited annually and reviewed by an actuary.


  • 7.1.4 Only use the trust funds for their proper purpose; or


7.2 Apply money received for funeral plans, as soon as practicable towards a contract of whole life assurance with an authorised person who has permission to effect and carry out such contracts of



8.                  COMPLAINTS AND DISPUTES


  • 8.1 The FPA defines a complaint as: Any expression of dissatisfaction raised by a customer or on behalf of a customer whether oral or written, justifiable or not.


  • 8.2 A Plan Provider must have a clearly defined and documented Complaints Process.


  • 8.3 Plan Providers must allow complaints to be made by any reasonable means.


  • 8.4 A Plan Provider must put in place appropriate management controls and take reasonable steps to ensure that in handling of complaints it identifies and remedies any recurring or systemic


  • 8.5 A customer who is dissatisfied with the service provided by a Plan Provider should, in the first place, contact that Plan Provider who must acknowledge receipt of the complaint to the customer in writing within 7 working days of receiving a complaint.


  • 8.6 A Plan Provider must provide contact details of the FPA to a customer in the final letter to a complainant and in any holding letter if the complaint is not resolved within 8 weeks of the Plan Provider receiving it.


  • 8.7 If a Plan Provider cannot resolve a complaint to the customer’s satisfaction, the customer should contact the FPA (whose address and telephone number are set out below). The FPA provides an independent conciliation and arbitration service.


  • 8.8 Plan Providers are required to co-operate with the customer redress procedures and to participate in the independent conciliation and arbitration service mentioned in paragraph 7. Plan Providers are bound by an arbitrator’s decision, subject to the right of the Plan Provider or the customer to seek a review of the decision.



  • 8.9 If in the course of any conciliation, or following the conclusion of any arbitration, it appears that a Plan Provider has infringed this Code of Practice, the FPA may take disciplinary action against that Plan Provider in accordance with its Rules.


  • 8.10 Plan Providers must provide on all price lists and other promotional material an address and email address (or, if this is not practicable, a telephone number) to which communications may be directed.


  • 8.11 Plan Providers must have copies of this Code of Practice available to distribute to customers and others free of charge.


  • 8.12 Plan Providers must display the logo of the FPA at their place of business and on all price lists and other promotional material.


  • 8.13 Plan Providers must co-operate fully with those representing consumers including trading standards officers, Citizens’ Advice Bureau or other consumer advisers.





  • Under the FPA Rules, Plan Providers are responsible for the acts and omissions of any third party they work with in providing funeral Consequently, they should have procedures in place to ensure that any third party is operating in line with this Code of Practice and the FPA Rules. The FPA is aware that the situation could arise where more than one Plan Provider, and potentially providers that are not registered with the Authority, may be working with any third party. This does not absolve the Plan Provider from the requirements set out in this section 9 of the Code of Practice.


  • As a minimum the FPA would expect a Plan Provider to:


  • carry out due diligence before working with a new third party;


  • have in place a written contract;


  • ensure contractual arrangements require the third party to operate in line with the FPA Rules and Code of Practice;


  • ensure that contractual arrangements between the Plan Provider and the third party would cover the right to control messages and marketing materials, requirements in respect of training, requirements in respect of monitoring including access to the source of all data used in the sales process;



  • set remuneration arrangements, which should not result in product bias or customer detriment either through incentivising inappropriate selling processes and sales or undermining the financial position of the Plan Provider in a manner that risks the ability to deliver any new plan or existing plans;


  • restrict the use of sub-agents without specific permission from the Plan Provider (and in any event after appropriate due diligence has been conducted by the Plan Provider); and


  • have appropriate termination rights and processes so the Plan Provider can terminate if the third party


  • Plan Providers should have in place a clear, structured and documented on-boarding process for any new third


  • Plan Providers should monitor the third party operation to ensure that the FPA Rules and Code of Practice are being adhered Such monitoring should be clearly documented and available for inspection on request by the FPA.


  • Where a Plan Provider is working with a third party who is working with other funeral plan providers this does not absolve the Plan Provider in respect of their responsibility to ensure the third party is complying with the FPA Rules and Code of



  1. DATA PROTECTION        ACT       1998      AND       GENERAL        DATA PROTECTION REGULATIONS 2018


  • Plan Providers must ensure that they comply fully with GDPR requirements, this includes but is not limited to, asking for customer consent to hold and use personal data, recording consent, managing consent and withdrawal of


  • Plan Providers must co-operate fully with the FPA recognising the specific consent given to FPA by customers under data protection regulations to share and discuss customer data for the sole purpose of investigating complaints under clause 7.



11.              PLEDGE TO CUSTOMERS


All Plan Providers shall co-operate in the delivery of the FPA’s “Pledge to Customers” by which, in the event of the insolvency of a Plan Provider, the other Plan Providers will examine ways in which the FPA might assist in arranging delivery of the funeral of the customers of the insolvent Plan Provider. The extent of this co- operation will be at the discretion of the individual Plan Providers.


Anyone who experiences difficulty in obtaining services under a funeral plan because a Plan Provider or funeral director is insolvent or no longer in business should immediately contact the FPA.






Funeral Planning Authority CiC

Barham Court, Teston, Maidstone, Kent, ME18 5BZ Telephone: 0845  601 9619



© Funeral Planning Authority CiC April 2019

Funeral Planning Authorities Rule Review Findings 2019

I am sure that the FPAs report is not designed to stiffle competition – to the detriment of consumers – but that is exactly what will happen if it is adopted as is – see Question 15 below.

Formal Response to August 2018 Consultation on FPA Rules and Code of Practice April 2019

In August 2018 the FPA issued a consultation document to all FPA registered providers and other stakeholders outlining of our thinking regarding proposed changes to our Rules. We asked specific questions that we welcomed responses to, and we also welcomed general input on any aspect of our proposals. Similarly, we outlined our thinking regarding changes to the Code of Practice and provided a draft version for review.


Consultation responses were invited by 14 September 2018, with our aim being to finalise our way forward by 31 December 2018. The new Rules and Code of Practice would then be put in place with appropriate transitional provisions as necessary to ensure a smooth implementation. Following receipt of consultation responses, the FPA Board considered them and a further discussion was held at the FPA Stakeholder Group meeting on 6 November 2018. This Group had been provided with a high level summary of responses as part of the meeting pack.


The FPA received input pre-consultation responses from the Stakeholder Group meeting on

26 June 2018, which were broadly supportive of the changes being proposed. Formal responses to the consultation were received from 8 companies.


Having taken note of all input received and considered the various arguments put forward, the FPA Board have prepared this summary of response together with conclusions on our intended way forward. This includes revisions to the Rules and Code of Practice. These are final documents and our intention is that these new Rules and Code of Practice take effect from 1 January 2020. In the meantime the FPA will be seeking input from providers on their readiness to comply with the new Rules and Code of Practice.


Q.1   Do you agree the suggested principles governing the Rules and Code of Practice are appropriate? What suggestions do you have, if any, for amending this set of Principles?


There was general agreement that these principles were appropriate. It was suggested we should consider amendments on:


  • Changing “not obstruct competition” to “promote competition to the benefit of theconsumer”


  • Change sales methods to sales channel or sales model to ensure there is no confusion over how our Rules / CoP might react to poor sales


The FPA believe these proposed changes make sense and appropriate amendments have been made.


Q.2   Do our proposals around plan allocation adequately address the concerns that arise from the lack of allocation of plans? Do you have any suggestions as to how the proposal could be developed?


There was a strong sense in responses that the FPA should go further than we proposed and require allocation. This was further emphasised at the discussion of the Stakeholder Group, with support from both providers and funeral directors. We recognise that this needs to be a prospective rule and that for existing plans there are more challenges. We also recognise that there is debate as to what allocation means in terms of whether we means allocated to a particular FD or to a particular branch of that FD.


Having considered the weight of feedback we are persuaded by the arguments and consequently have changed our proposed Rules to require allocation at or around point of sale to a funeral director company (not necessarily an individual branch) for new plans after 1 January 2020. The Rules require that a customer is made aware of that allocation sufficiently within their cooling off period to allow them to cancel if they are unhappy with the allocation. The Rules also require that the allocated funeral director is explicitly aware the plans has been allocated to their business.


We have also suggested that for plans sold prior to 1 January 2020 registered providers need to provide us with a report confirming details of the current status of all plans in terms of allocation and confirmation as to whether customers are aware of that allocation.


Q.3     Do our proposals around accounting for guarantees help ensure that where guarantees are sold to customers they can be delivered? If not, have you further suggestions as how we might achieve this objective?


There was general support for this proposal with a requirement to clarify language and some detail. We have incorporated further wording to clarify our intentions.


Q.4   Does our proposed Asset Adequacy Report represent an acceptable way forward in mitigating any consumer risk from provider failure? If not, how could the proposal be improved?


There was general support for the ideas behind this report. It was noted there was a need to cover future instalments, perhaps be more specific on what we mean by wholesale price and ensure the existence of the report doesn’t distort trust / insurance models. There were questions raised as to what this report adds on top of the actuarial valuation. Our view is the purpose is quite different and the proposed report is about ensuring that, should provider failure happen, the process is thought through and that there are sufficient assets available.


We intend to move forward with this proposal but with flexibility for the Registered Provider to choose the valuation date as either the calendar year end or their financial year end. To assist with understanding our requirements we have added an appendix providing further guidance.


Q.5    Do any of the alternative ways of enhancing the valuation of liabilities and or providing additional solvency cover provide a better customer outcome and why?


There were a few suggestions supporting alternative but also a recognition of the challenges of implementing (for example getting agreement from professional bodies). Given this feedback we have chosen not to pursue any alternative options.


Q.6   Do you agree with the proposal to keep any report private with the flexibility for providers to publish if they wish?


There was a mix of responses here with some suggesting more transparency and greater publication. Having discussed this, the FPA view is that we should begin by keeping these reports confidential and then separately consider publication in the future when reports have been developed and we have issued further guidance on what we might consider as best practice.


Q.7    Do you agree it is helpful to have Principles of Business set out in the Code of Practice?


It was broadly agreed these were helpful and noted that we should ensure Rules are consistent with these Principles. We believe that they are and will seek to ensure any future amendments stay true to the Principles.


Q.8   Do you agree with our proposed approach to guidance we have issued? If not, why not?


This was generally agreed and it was suggested that moving forward the Rules would benefit from additional guidance, which is a feedback point we will take on board and seek to implement across a range of areas.


Q.9     Is our definition of vulnerable customers sufficiently clear? How could it be improved?


The feedback we received suggested that we needed to revisit our definition and provide greater clarity. We received some helpful suggested wording and encouragement to look further at FCA definitions. We have done so and a revised definition is included in the revised Rules.


There was also a suggestion that we should make it mandatory for providers to have a vulnerable customer policy. This was heavily supported at the Stakeholder Group discussion in November 2018 and we have incorporated this into the revised Rules / CoP


Q.10  Is our proposed minimum cooling off period acceptable? If not why not?


This was supported with further comments that there needs to be clarity on when the period starts and potentially consideration in the future for the period to be extended. We have incorporated further amendments to clarify our view.


Q.11   Are our additional requirements in relation to customer information appropriate? How could they be improved?


These proposals were broadly supported, with some concern raised over a small number of specific points. On FMP plans one provider did not support the idea of disclosing the maximum amount that might be paid under an FMP plan, and another thought we should go further in our requirements more in line with the Financial Promotions regime.  The FPA Board have considered the various points raised and in relation to the FMP requirement, have amended the position to require providers as a minimum to disclose the age at which the contributions paid to the FMP based funeral plan will equal the current cost of the equivalent plan paid by a lump sum. Alternatively (or in addition) the provider can disclose the maximum amount that would be paid for the plan if contributions continue until age 90.


Q.12  Is our definition of a complaint appropriate? How could it be improved?


There is support for a definition of a complaint, and suggestions that we should differentiate between customer complaints and other complaints such as FD disputes with providers. We will look further at this. More significantly, comments were made about having two tiers of complaint more along the lines of the revised FCA complaints definition. This effectively involves separating low level expressions of dissatisfaction, which have no material impact (financially or otherwise) on the customer from more significant complaints. We have considered this and believe that such a caveat would require providers to demonstrate they could identify the expressions of dissatisfaction and evidence how they determine whether any particular situation falls into one category or another. Given this, and the relatively low level of complaints in the industry, we see little merit in adding additional complexity. Of course, none of this precludes firms having their own separation on this basis. We will therefore continue with our proposed definition with a minor clarification to highlight that the complaint has to come from a customer or someone complaining on the customer’s behalf.


Q.13    Are our proposed complaints reporting requirements appropriate? How could they be improved?


These were broadly supported with requests for further guidance from the FPA on complaint categorisation and root cause. We will seek to issue further guidance in due course.


Q.14   Do you agree with the incorporation of the requirements re third parties directly into the Code of Practice? If not, why not?


These proposals are supported with acknowledgment that complying puts a burden on firms.


Q.15   Do you agree with the proposed requirements for Registered Providers in respect of third parties? If not, why not?


There was general agreement on these requirements. Some concern was raised over firms selling more than one provider’s plans, further heightened when a combination of FPA / Non FPA providers plan are sold. We have considered this but unless such third parties are providers are directly regulated by the FPA (which is currently not a feasible solution) we cannot see an easy solution to not make this a requirement for FPA providers.  Ultimately, if a provider cannot oversee what such third parties are doing then the provider should not be working with them.

Comment from the Prepaid Funeral Review Team.

Q15 will stiffle the development of competition and of the sort of Independent Advice which we give by making it far more difficult to work with multiple FPA Members and impossible to work with both FPA members and non members,  We have had cause to complain about both members and non members, so we believe this would be a step to far in protecting consumers – competition and multiple choices has to be best for consumers, as is Independent Financial Advice.

Q.16  Do you think our approach to training and competency is sufficient?


There was a general agreement but a question was raised about whether there should be a separate section in CoP that goes further and explains the concept of Fit and Proper and our interpretation of it.  The FPA Board have considered this and have added additional guidance in our Rules as to how fitness and property is assessed.


Q.17    Do you agree with our proposed approach to commission disclosure and also disclosure of all aspects of the value chain including commercial arrangements between Registered Providers and Funeral Directors? Please explain your reasoning.


There was general agreement on proposals with one dissenter suggesting disclosure of both commission paid and amount set aside to pay the funeral. The FPA Board has recognised this is an issue that needs further consideration and we will be pursuing further investigation of the issues involved.


Q.18  Do you agree we should not seek to ban particular approaches to selling?


There was general agreement that we should not be seeking to ban approaches to selling. However, there was a caveat that if something is clearly bad for customers then we should ban and not rely on anti-competitive arguments to support no action. The FPA Board accept this and will ensure our Rules are focussed around customer protection.


Q.19   Do you agree with the suggested approach of granting the Compliance Committee additional powers including the ability to level fines and make suspension of registration public? If not, why not?


The responses were supportive but there was a clear message that the Rules need to be clearer with regard to the role of the Compliance Committee and Disciplinary Process. There was support for making the outcome of any disciplinary process public as long as firms are given right to appeal before publication. The Rules have been amended to add further clarity and address comments raised without changing the role of the Compliance Committee and the Disciplinary Process.


Q.20   Do you agree a limit of £10,000 on the fine that can be levied by the Compliance Committee is appropriate? Please explain your reasoning.


It was noted that this needs to be more clearly explained in the Rules but general acceptance of the proposal. The Rules have been amended accordingly to increase clarity.


Q.21   Do you agree with the proposal to allow the FPA to appoint a skilled person on the basis suggested? If not, why not?


This was supported but with a caveat that there needs to be sufficient protections in place to ensure the FPA used such a power in a proportionate and controlled manner. Having considered this, the FPA Board has added a further constraint that any such proposal to instigate a skilled persons report has to be explicitly agreed by the FPA Board. The Rules have been amended to reflect this additional condition.


Q.22   Do you agree with the proposal to increase the maximum fine the FPA can levy? Please explain your reasoning.


This was agreed, recognising the requirement for further clarity noted in response to questions 19 and 20.



Q.23    Do you agree that the suggested levels of the maximum fine are appropriate? Please explain your reasoning.


This was agreed, recognising the requirement for further clarity noted in response to questions 19 and 20. It was also noted that we need to clarify what is meant by turnover. Additional wording has been added to this effect.


Q. 24 Do you agree with our proposal to allow a Disciplinary Panel to require the FPA to make the result of a Disciplinary Decision Notice public? Please explain your reasoning.


This was broadly supported, subject to having appeals processes that were completed before publication of any Disciplinary Decision Notice. The Rules have been amended to clarify this point.



Dignity Funerals Declare War!

Dignity Funeral Plans, like all of the major players in the prepaid funeral plan market have been significantly affected by the large number of new entrants into the funeral plan market, some with very aggressive sales techniques. But Dignity are fighting back to maintain their market share, and the first salvo was the dramatic price reduction until 30th April 2019. They have also formulated a 3 year plan to fend off the invaders (not quite their words!) Why not contact us to see if a Dignity Plan would be right for you? More on their plans here.

Mike McCollum, Chief Executive of Dignity plc, commented:

“2018 marked the beginning of a period of radical change for Dignity. We reduced our funeral prices, created a broader range of choices for clients and embarked on plans to transform the business by the end of 2021.

Our vision is to lead the funeral sector in terms of quality, standards and value-for-money. To achieve this we are building a more coherent, cohesive and technology-enabled business, one geared to meeting the changing needs of our customers. I am pleased with the progress we made during the year, we built momentum and our Transformation Plan is on track. A lot of work remains to be done, but I am confident that with our highly experienced staff and the new transformation expertise we have brought in, we will achieve our goals.

2019 is likely to mark the start of the Competition and Markets Authority’s (‘CMA’s) investigation into our industry. Our surveys demonstrate that the majority of clients assume the funeral industry is regulated, when it is not. Some may assume that they will receive the same quality of service from different operators irrespective of price. They will not. I am proud that underpinning all of the changes we are making to our business is a continued, relentless commitment to the highest levels of client service. This commitment makes me confident that we have the quality necessary to achieve our ambition of getting ahead of the competitive curve, leading the industry and providing sustainable growth.”

Preliminary results for the 52 week period ended 28 December 2018

Dignity plc (Dignity, the Company or the Group), the UK’s only listed provider of funeral related services, announces its preliminary results for the 52 week period ended 28 December 2018.

Financial highlights52 week period ended 28 December 201852 week period ended 29 December 2017Increase / (decrease) per cent
Revenue (£million)315.6324.0(3)
Underlying operating profit (£million)80.2104.6(23)
Underlying profit before tax (£million)54.477.8(30)
Underlying earnings per share (pence)85.8128.3(33)
Underlying cash generated from operations (£million)101.9115.4(12)
Operating profit (£million)66.398.0(32)
Profit before tax (£million)40.571.2(43)
Basic earnings per share (pence)63.0115.8(46)
Cash generated from operations (£million)94.9112.5(16)
Interim dividend paid in the period (pence)8.648.64
Final dividend proposed in respect of the period (pence)15.7415.74

Alternative performance measures

All measures marked as underlying in the table above and throughout this Preliminary Announcement are alternative performance measures. The reasons for the Group’s use of alternative performance measures, definitions and where relevant, reconciliations are provided in the section on alternative performance measures at the end of this announcement.

Key points

  • Number of deaths as expected;
  • Comparable funeral market share increased slightly following significant declines in 2016 and 2017;
  • Simple funeral pricing reset;
  • Unbundled funeral replacing full service package;
  • Simplicity service offering expanded;
  • Transformation team in place;
  • 3 year detailed Transformation Plan established;
  • Good performance from crematoria; and
  • Pre-need environment remains challenging.

Regulation of Funeral Plans: Developments in 2019

News from Parliament – regulation of funeral plans.

The Financial Conduct Authority is to take on the overall regulation of funeral plans sometime in 2021.  Of course, they already regulate parts of the market now, directly or indirectly.  Client funds are quite well protected already.  UPDATEI have to say that my concern is that the FCA will continue the slash and burn policy of its predecessors, which has deprived most of the UK of the ability to get affordable INDEPENDENT Financial Advice.  As pretty much the only independent funeral plan advisers in the UK, we’re worried that the need for Independent Advice will continue to be low priority, and therefore life will be made very difficult for those trying to give advice from across the market. Lack of direct competition through Independent firms will mean for people selling just a single providers plan, so anyone wanting to check things out carefully would have to interview twenty or so salespeople, and analyse the written material they give out (assuming you can actually get it!)

Here are some thoughts for the Financial Conduct Authority:

Regulation tends to be expensive, heavy-handed not light touch. Can you change your spots?

The first priority is the use and management of client funds and what can be taken out of them once they are in Trust and make that information readily available.

Second is the issue of who provides guarantees – is it the company with the £1 capital? This should be clear in all literature.

Third is sales techniques, selling over the phone without sight of full details should be banned, and all sales people should be referenced and Disclosure checked. Training on vulnerable people is a must, but that aspect is going to be impossible to manage with the compo culture fostered by regulation as nearly all buyers are at least as old as me and therefore may be considered incompetent!

Fourth, training of salespersons is where it starts to get difficult – if every company is required to train everyone who sells its plans, the embryonic independent advice market is likely to be stifled, to great detriment to both the market and the consumer.   Look at what has happened in financial services – 90% of advisers gone. nearly 100% of company sales forces gone and independent financial advice now only available to the rich.

Fifth is commissions – the FCAs standard response is to insist on fees being charged. We are generally talking about people who neither have a history of taking professional advice, nor significant financial resources, which is why they are setting up the plan. Whilst I agree that commission levels should not be the reason a plan is sold, there would be many fewer sales if there was no commission and a greater burden on credit cards to pay for funerals.

We have made a start on an independent course, which we hope would be supported by the FPA, but its’ first draft was too rough, and I have yet to send them the second – just been too busy!

Steve @ The Prepaid Funeral Review on the regulation of funeral plans.

Funeral Plan Regulation.

“Funeral salesmen ‘misleading customers’ over contracts, MP says (we agree!)  Funerals paid for upfront should be subjected to tighter regulation to prevent people being hit with hidden charges, ministers have been told.” We do agree that many adverts for funeral related products are misleading, as are some funeral plan websites.  We also agree that some “salesmen” don’t understand the products they are selling.

But the record of the regulation of financial services would appear to show that their greatest achievement in times of rising need is to prevent the public from getting advice at all.  So whilst we do agree that improvements are needed, we don’t think you could pick on a more overpaid and less effective bunch than the Financial Conduct Authority to “improve” things.

Our suggestions would be:

  1. Complain about misleading adverts to the Advertising Standards Authority.
  2. Read the brochure and terms of business before buying a plan – even if it is through us!
  3. Annoy the provider by paying by cheque. It is more secure.
  4. Providers should impose knowledge tests on their own staff and agents (in fact we have heard moves in that direction already).
  5. Report liars and cheats to Trading Standards.
  6. Have SIMPLE licencing system for sales people. Our staff are all properly checked out. Pretty much anyone other than the FCA could run such an operation on an annual fee of £25 or so with initial application fee of £50 or so to include criminal records check.  Any complaints could be reviewed by the same organisation.  If the FCA get the job they will want to appoint a Director of Funeral Plan Regulation at a cost £500,000 a year with all the trimmings and an executive team in expensive Canary Wharf.  They will make sure it is someone with no knowledge or understanding of the industry but great skill at devising complex, meaningless rules and hoops.   The Funeral Planning Authority is not, in my opinion, a candidate for this role as it is a gentleman’s club not a regulator in any real sense of the word.  That said, the recent announcement of an independent board may signal a change in the right direction: perhaps they will sort out their members before laying claim to regulating non-members.
  7. A recent development which we don’t like, and is a miss-selling scandal waiting to happen is the cut down funeral plan.  Some of these could result in funeral (which family members can theoretically attend) being held 40 miles away at 9.30 in the morning.  Not great, in our opinion, just a lot more expensive than a Direct Cremation plan. They have their place, like direct cremation, but people need to understand their real impact before saving a few hundred pounds.
  8. MPs seem to have been misinformed – more competition in the funeral plan market is driving both innovation and more competitive pricing.  One provider is even training new Funeral Directors in a bid to reduce funeral prices.
  9. One massive component of the cost of a funeral is the cost of cremation.  Crematoriums usually have a semi monopoly position in their area.  Dignity in particular has been taking advantage of this and now owns or operates 17 of the 20 most expensive crematoriums in the UK, according to Funeral Booker. Surely time for the Competition and Markets Authority to take a look?