Countdown to FCA authorisation

words: Richard Sutcliffe, FCA
FCA countdown

From July 29, 2022, the FCA will start regulating the pre-paid funeral plans sector. So funeral directors need to start considering their options and getting ready for authorisation or registration as an Appointed Representative.

We’re working to make this transition to regulation as smooth as possible, but it relies on firms in the industry making informed decisions, at the right time, about their future under FCA regulation.


Essentially, if you introduce, sell or provide pre-paid funeral plans, then you’ll need to be registered by us.


You won’t need to be FCA regulated if you don’t deal with pre-paid funeral plans or are exempt (e.g. local authorities or if the plans are for funerals outside of the UK). Also, if you don’t sell or enter into pre-paid funeral plans, and instead just provide funeral services then you won’t need to be FCA regulated.


Funeral directors that sell only other providers’ funeral plans – known as intermediaries – have two options to be regulated under our rules. You can either become a Directly Authorised intermediary or become an Appointed Representative of a provider firm.

Becoming Directly Authorised as an intermediary means that you will need to apply for authorisation from September – and explain how your firm will meet our standards, known as the Threshold Conditions. If we give you authorisation, you will need to make sure you continue to comply with our regulations, send us periodic reports and co-operate with our Supervision team.

Becoming an Appointed Representative is another route, if selling only those plans provided by others, acting as a sales intermediary. Becoming an Appointed

Representative means that the plan provider firm – the ‘Principal’ firm – has overall responsibility for your conduct under FCA regulation. You will enter into a written contract with the Principal firm.

Our rules will still apply, and you’ll be expected to meet our requirements. But you’ll work directly with your Principal firm to ensure you conduct your regulated business in a way that complies with our rules.

There’s information on our website about Appointed Representatives to help you decide which option’s best for you. You’ll also need to speak to the provider whom you’d like to be your Principal firm, to discuss becoming their Appointed Representative. Your provider can apply to be authorised from September, and must complete the process by the end of July 2022 and notify us that you will act as an Appointed Representative.


To register as an Appointed Representative, there is a different process than becoming Directly Authorised. To become Directly Authorised, you’ll need to submit a full application and supporting documents, showing how you meet our Threshold Conditions. Whereas to become an Appointed Representative, your Principal will submit a notification to us.

You’ll need to make sure that you carefully discuss the contract terms with your Principal firm, so you both understand what’s involved to ensure you meet FCA standards. Your reporting requirements will be different as an Appointed Representative. Directly Authorised firms need to submit regular reports to us. Appointed Representatives report to their Principal firm – so you’ll need to allow your Principal firm access to your staff, premises and relevant records so that they can ensure you meet our standards. Again, you’ll need to work closely with your Principal firm.

You should also consider the costs of operating as an Appointed Representative against the costs of being Directly Authorised when making your decision.


We know that some independent funeral directors provide their own pre-paid funeral plans to customers, backed by their own trusts. If you do this, you will need to become Directly Authorised as a funeral plan provider to continue to deliver your existing plans, and to enter into new contracts after regulation.

If you currently hold a book of your own pre-paid funeral plans, but don’t intend to apply for authorisation as a plan provider, you should contact us at funeralplans@fca. to confirm how you intend to dispose of this book, e.g. through selling it to another provider, in an orderly way pre-regulation.


As a key part of our regulation, you should focus on making the process of buying a funeral plan clear and fair for all consumers. This is to help them make a well-informed decision and reduce the risk of them buying a product that’s not appropriate. As well as requiring firms to give customers clear information about products, we’re also introducing new sales standards to further reduce this risk.

Firms will need to consider whether or not they provide advice in the sales process. For non-advised sales, firms will need to:

  • Ask the customer questions to identify both their demands and their needs.
  • Carry out an assessment of those demands and needs.
  • Only propose products to the customer which they assess as meeting those demands and needs. If the firm does not have any products which are consistent with the customer’s needs, they cannot offer the consumer anything.
  • Clearly state to the customer the demands and needs you have identified.
  • Where firms want to provide advice, they should also ensure that products they recommend meet the customer’s needs.

There is much more detailed information in our recent Consultation Paper and subsequent Policy Statement (which gives details about our rules for the industry).


We have been working closely with SAIF, the NAFD and key organisations in the pre-paid funeral plans market. We’ll continue to do so throughout the authorisations gateway period and once our regulation begins. We’ll also continue to work with the other statutory regulatory bodies and consumer organisations, to make sure that the transition to FCA regulation goes as well as possible for firms, consumers and everyone involved.

Timetable to registration

  • Funeral directors who become Appointed Representatives need to do so by July 29, 2022, when FCA regulation begins.
  • Providers and other directly authorised businesses can apply for authorisation from next month, on September 1.
  • After July 29, 2022, it will be a criminal offence to conduct any pre-paid funeral plan business, including administering existing plans, without the proper authorisation or Appointed Representative status.
  • That’s why it’s important to consider your options now and prepare for registration.
Tags: , , , , ,