Golden Charter Backs Funeral Plan Regulation


• Golden Charter backs new Code of Practice.
• Welcomes industry report on pre-paid funeral plans.

Increased regulation of pre-paid funeral plans and wider powers for the Funeral
Planning Authority (FPA) would ensure continuing consumer protection and
support, the UK’s leading funeral plan provider Golden Charter believes.
It is backing moves at the FPA to strengthen the Code of Practice for providers
in the growing market, as well as a push requiring all companies operating in the
sector to be registered with the FPA. While the overwhelming majority of prepaid
funeral providers are members of the FPA, the industry self-regulatory body
which exists to protect consumers’ interests, membership is voluntary only. This
means that some providers and intermediaries are operating without an
independent body to hold them to account.

A recent report by consumer group Fairer Finance called for full Financial
Conduct Authority (FCA) regulation of pre-paid funeral plans.

Mark Moran, Golden Charter’s Director of Intermediaries, said: “We welcome this
report and the points it raises in relation to ensuring customers fully understand
what level of cover they are getting when they take out a funeral plan.
“As a founding member of the Funeral Planning Authority, consumer protection
has long been a priority for Golden Charter and we continue to strongly
recommend that customers seek out a plan from an FPA-registered provider.
“We only work with proven third parties and our policy is for all new
intermediaries to be professionally accredited. Our belief is that a stronger FPA
with mandatory membership for funeral plan providers and those marketing
funeral plans is the best way to ensure consumer interests are protected.”

The Fairer Finance report also highlighted the negative aspects of insurance backed
plans, where money paid in is lost if the plan holder stops making payments.
Mark continued: “Guaranteed whole of life plans have been the subject of
criticism for many years, but have remained a suitable vehicle for a proportion of
the population. We believe in offering a wide range of payment methods to
ensure customers can select the option that best suits their individual
circumstances. Our low cost instalment payment option is an alternative to
insurance-backed payments, offering similarly low premiums while ensuring any
money paid in is not lost if payments stop. These funds will be held in the Golden
Charter Trust until the time of need.”

The market leader, which is owned by an association of around 730 independent
funeral directors situated throughout the UK, also believes more needs to be
done to educate consumers on the nature of funeral plans, which can be
mistaken for financial investment products.

Mark said: “It’s a common misconception that a funeral plan is an investment
product, when in fact it is a contract which allows an individual to pay for a
funeral in advance. This distinction is important as it means that at the time of
need, with a Golden Charter funeral plan, the funeral director’s services included
in the plan are guaranteed to be covered – no matter what.”

All funds* received from the sale of funeral plans by Golden Charter Ltd are paid
into the Golden Charter Trust. The Trust is a fund whose assets are entirely
separate and independent of Golden Charter Limited. The most recent actuary’s
report at March 2017 showed that the Trust’s assets were valued in excess of
100% of the funds required to meet future invoice costs in respect of all the
funeral plans in the Trust, allowing for increases in funeral costs in line with
future levels of inflation as measured by the Consumer Price Index.

*If the fixed monthly payment option is selected, funds are paid into a UK based
life assurance company.