FCA publishes list of funeral providers it intends to authorise

The Financial Conduct Authority (FCA) has published a list of providers it intends to authorise when the pre-paid funeral plans industry comes under its regulation from 29 July.
 
24 firms are on the list, including Sutton Coldfield based Dignity. These firms hold around 87% of existing customer plans. The FCA is still assessing a small number of providers’ applications.
 
Currently, 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.
 
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 providers will need to keep 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.

Kate Davidson the CEO of Dignity said: “We have long called for regulation of the funeral plan sector. We believe it will deliver greater transparency and protections for customers, whilst also paving the way for greater confidence in funeral plans as a good product that helps people plan and pay for their funeral in advance.

“There has been a huge strategic and operational effort within Dignity to deliver the comprehensive evidence required by the FCA for us to achieve this authorisation.

“The regulation impacts almost every corner of our business; from compliance and governance, an enhanced focus on customer vulnerability and consumer redress processes, training and people development, as well as a new approach to how we market and sell our product”.

Emily Shepperd the 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.”