SAIF Golden Charter

Funeral planning panel discussion

In Education Day’s longest session, Declan Maguire moderated an expert panel of funeral plan providers, featuring:

• Mark Moran, Golden Charter
• Barry Floyd, Golden Leaves
• John Taplin, Open Prepaid Plans
• Chris Clark, Ecclesiastical

Planning Services

For Golden Charter, Mark said: “It’s been a long time coming. I think the biggest journey that anyone has been on is the Financial Conduct Authority (FCA). They have found it a struggle to really understand the industry, so they’re on a big journey and we’re all doing our best to try and help them through that process.”

Barry Floyd, of Golden Leaves, said: “It’s been a difficult journey really. The FCA have listened to everyone and taken notice of no one. Although myself and all of my friendly competitors here have spent a lot of time in interactions with the FCA, it’s now coming home the amount of interest they’ve taken.”

Open Prepaid Plans’ John Taplin said: “Similarly, the FCA listens to what you say and says thanks very much and leaves it there. What we have come across most recently is they seem to be under the misconception that one size will fit all, and that is not the case.”

Chris Clark from Ecclesiastical Planning Services said: “We have some considerable knowledge and expertise in dealing with FCA regulation and that’s standing us in good stead as we enter the transitional period. They’re definitely on a learning curve in terms of the funeral director market, but having said that we do feel that we’re being listened to.”

What has led to this point?

Ecclesiastical: “When I first started researching the funeral plan market in 2004, I was amazed funeral plans weren’t regulated at that time. What we’ve seen develop over the last few years are all sorts of different sales channels. That’s involved using sales tactics that would not be used in a regulated marketplace.”

Golden Charter: “The product being unregulated has meant there are low barriers to entry. As soon as PPI started to wane, funeral plans became popular with companies with call centres and data. Then the commissions started to ramp up from there. We were on a collision course for FCA regulation from that point.”

Golden Leaves: “We shouldn’t tar everyone with the same brush. Whenever you sell anything, there’s going to be salesmanship. We did a lot of research over the last few years about the type of client that buys from a funeral home and who buys from a planning firm. They’re two very different audiences.”

Open Prepaid Plans: “We’ve watched much of it from the sidelines. We’ve only ever really sold plans through funeral directors. We’ve seen the good, the bad and the ugly and stayed quietly out of it.”

Appointed Representative (AR) or Introducer Appointed Representative (IAR)?

O: “In simple terms, the AR route will require the funeral director to submit a lot of detail around their business and operations on an annual basis. The IAR is just an introducer model. It’ll be nothing but handing out a brochure with contact details and telling an enquirer someone will be in touch.”

GL: “There is a definite benefit of being an AR and selling a plan to your own client. But you are going to have situations where individual businesses only sell a handful of plans a year. Is it operationally too much of a disturbance for them to want to become an AR of someone rather than an introducer?”

GC: “It’s really important we make funeral directors aware of what both options are so they can make an informed decision. At Golden Charter during COVID, we offered an enquiry support facility which was effectively like the IAR model. In the research we did afterwards, it was fundamental how much the customer valued the funeral director conversation and they lost that. That reinforced that in an ideal world AR is the best route.”

Will monitoring requirements be a challenge?

E: “The monitoring programme we’re putting together for the AR model is based around a proportional approach. Some businesses have been around for 100 years and longer and have very experienced professionals working in those branches. Complaints are very minimal. We have a lot of desk-based monitoring material we can use. Then it’s a case of agreeing with the FCA what are appropriate measures.”

GL: “What we do is we compliance check every single sale. And we’ve been working under that regime now for three years. Vulnerable clients is a massive thing with the FCA and checking a client actually knows what they’ve purchased.”

O: “We’re talking about 240-250 funeral directors and, from that perspective, it will be easier for us to enforce. We fully expect that over the next five years those requirements will change year in, year out.”

GC: “We need to look at four things: business monitoring, monitoring around the individual,

the sales process and training – a 15 hours Continuing Professional Development (CPD) requirement of anyone who’s selling plans. Plan providers need to work out the best way to bring that training to funeral directors. It could be a combination of structured and unstructured. We’ll all look at how best to roll that out.”

Does regulation favour vertically aligned or corporate providers?

O: “Under FCA regulation we’ll all be under the same rules. It doesn’t only favour that sector, it gives everybody a chance to be under a decent set of guidelines.”

E: “In the short term, I would say that there could be a real opportunity for Independents. The big corporates are having to contend with FCA regulation on quite a big scale. For independent funeral directors there’s an opportunity to embrace the world as we go forward, work closely with a plan provider and develop your team.”

GL: “Yes there are opportunities for the independent sector, but that depends on how engaged you are going to be. You will have businesses who are engaged, you’ll have businesses that aren’t. That is just the nature of dealing with numerous different companies.”

GC: “The last stat I saw was more than 60% of funerals in the UK are still carried out by independent funeral directors. It’s about how Independents interact with the family at that point. What the Co-op and Dignity can do is mandate targets.”

What will the market look like in 2023?

GC: “The customers will still be there, I’m certain demand for plans will still exist and regulation will give customers confidence. If you continue to engage and have conversations with families, that is key. The market will still be there in 2023, the opportunity sits with us to make the most of it.”

GL: “Some of the companies and activities the sector’s witnessed, are they going to go away? No. Has regulating the plan market got rid of that activity? It’s going to deposit it in the high-cost regulated, commission paying and insuring world.”

O: “We actually meet many of the requirements already. I hope we can move ourselves on from the sense that a great deal of funeral directors see funeral plans as a necessary evil.”

E: “I think we’re in for a torrid time over the next 12 months. I think there are a number of plan providers intending to apply for FCA authorisation who won’t meet the standard. But I don’t think we should get too depressed about that because we need to think about the opportunities.”