SAIF Golden Charter

FCA regulation: “Understand your needs before seeking paid advice”

As Financial Conduct Authority (FCA) regulation approaches, Golden Charter has encouraged Independents to think carefully about their own circumstances and intentions before accepting invitations from advisers or consultants, at a time when plan providers may be better placed to offer free advice and guidance.

Golden Charter’s Director of Emerging Market Insight, Malcolm Flanders, said: “A common question currently being asked of the trade associations is whether or not Independents should employ a specialist regulatory consultant or IT system to meet the needs of the FCA. In fact, you have probably already received promotional material from firms of this type.

“The answer for 99% of Independents is absolutely not. Your planning company will provide all the support that you will need if you are intending to become an Appointed Representative or an Introducer Appointed Representative. The planning companies who become authorised by the FCA will be the only ones able to trade after 29 July 2022, and will be required to provide this advice and support to funeral directors introducing customers or selling their pre-paid plans.”

Malcolm added: “The FCA has made it plain that it expects most funeral directors to carry on selling plans in the ways they do just now. That most closely resembles the Appointed Representative model. Some may decide to become Introducer Appointed Representatives, but in those cases too the company providing the plans will take responsibility for compliance requirements, and we don’t anticipate any planning company would charge their partners for advice on this subject.

“It may be that some very large Independents are considering becoming directly authorised by the FCA. If that applies to you then it may well be appropriate to employ regulatory advisers as the responsibility in that instance does indeed rest with your firm.

“At this stage we are not aware of any independent funeral director who has confirmed this route as their intention. We understand that funeral directors have been inundated with approaches from a plethora of businesses and although we haven’t seen all of these sales pitches, there are common themes which come through.”

The Appointed Representative options are preferable alternatives to direct authorisation or ceasing to offer pre-paid plans for most businesses. Learn about these options at mygoldencharter.co.uk, by speaking to your Golden Charter business manager, or by sending any questions by email.