We find ourselves in a new year and, as ever, that means a new outlook. By now everyone in the funeral profession knows that nothing stands still, and we would hardly be a successful funeral planning company if we weren’t always planning ahead ourselves.
Last January, I said that each year is a fresh start for us. Some things never change – 2015 was a time of radical change, and I expect the same from 2016.
New FPA figures confirm that plan sales are increasing rapidly, to the point that more than a third of UK funerals now appear to be pre-planned every year. This ratio is climbing, with much of the growth fuelled by new players.
Diversification was perhaps last year’s big change, as legal services took on a larger role. That helped protect your position and increase profitability, which directly fed into the recent £1.8 million additional maturity bonus; our most direct reward to our owners by increasing funeral directors’ profits.
Having succeeded in our goals to protect the sector for today, we are now changing focus to helping Independents grow and make profits in the future. The time has come for more long-term thinking. Our objectives for this year build on those previous successes.
First we must continue to grow. Our half-year figures confirm that we are still on track to once again sell more plans than in any previous year, and that is the bedrock of everything else we do. Next, our efforts to protect Independents by diversification must continue. Including a Will with funeral plans was a big success of 2015; legal services is an area with an important future for the funeral planning profession, and we will help you take full advantage of it.
Also, in line with our long-term thinking, it is worth considering how we safeguard Golden Charter and take our next steps forward. We have come a long way with no buffer against potential bumps in the road. This year may be the time to begin addressing that risk by putting some profit aside as we carry out our usual general efficiencies.
Various options exist, all with different positive and negative points. Our administration fee has remained unchanged for eight years, while other planning companies charge significantly higher marketing levies. These options will have to be carefully considered to avoid negative effects. Alternatively, receiving more money from the Trust could be possible, but might require it to alter its hugely successful investment strategy. It is only prudent that we look into all options now to avoid problems down the road.
That not only protects us all; it opens options up to Golden Charter that could help the profession leap forward yet again. I have mentioned the possibility of acquiring businesses that could provide funeral directors with subsidised services, and that would be impossible without that initial buffer.
All of this is to be considered as we all move forward together. Returning to the immediate future, though, the fundamentals of our work together are as clear as ever. The final quarter of the financial year will again be hectic, as our marketing investment is laid down.
As I said, more than a third of funerals are now being pre-planned. The growth comes from many sources, including outside the funeral profession. There are now intermediaries out there who sell more funeral plans than all but the very largest plan providers.
Golden Charter will continue to do everything it can for Independents, but of course, funeral directors cannot be exclusively reliant on us. The numbers are clear: if every third funeral is pre-planned, you will be losing market share unless you can achieve the same ratio. You can future proof your own business by setting up those plans. If you carry out 100 funerals per year then you and your staff should be selling 33 plans a year at the very least.
As the final quarter rolls on, it is vital that funeral directors continue to grow with the industry. More families than ever are planning ahead, and Independents must continue to be the backbone of that growth.
Golden Charter Chief Executive