SAIF Golden Charter

Responsibilities under the FPA Rules

At the start of the year, we at the Funeral Planning Authority updated our Rules and Code of Practice. One of the key goals of our Rules is to outline the responsibilities plan providers have, and how these impact any of the third parties, including funeral directors, they work with in providing funeral plans.

As independent funeral directors you are an important third party, given that you not only ultimately carry out the funeral, but in many cases sell the plan as well. Our Rules impact how you work with FPA registered providers, so I would like to explain the requirements they place on providers so that you know what to expect.

Clause 9 of our Code of Practice states:

“Under the FPA Rules, Plan Providers are responsible for the acts and omissions of any third party they work with in providing funeral plans. Consequently, they should have procedures in place to ensure that any third party is operating in line with this Code of Practice and the FPA Rules. The FPA is aware that the situation could arise where more than one Plan Provider, and potentially providers that are not registered with the Authority, may be working with any third party. This does not absolve the Plan Provider from the requirements set out in this section 9 of the Code of Practice.”

As a minimum, our Code of Practice explains that the FPA would expect any provider you work with to do the following around their relationship with you:

• Carry out due diligence before working with you
• Have in place a written contract
• Ensure contractual arrangements require you to operate in line with the FPA Rules and Code of Practice in terms of the services your provide including selling plans
• Ensure contractual arrangements between the provider and you cover the right to control messages and marketing materials, requirements in respect of training, and requirements in respect of monitoring including access to the source of all data used in the sales process
• Set remuneration arrangements, which should not result in product bias or customer detriment either through incentivising inappropriate selling processes and sales or undermining the financial position of the provider in a manner that risks the ability to deliver any new plan or existing plans
• Restrict the use of sub-agents without specific permission from the plan provider (and in any event after appropriate due diligence has been conducted by the plan provider)
• Have appropriate termination rights and processes so the plan provider can terminate if you breach the agreement

While the specifics of how providers meet these requirements may vary, every FPA registered provider has the responsibility to meet them. In any situation where the Rules or Code appear to have been breached by a funeral director, we will ask the plan provider to account for the funeral director’s actions, including proving that the provider had appropriate controls in place to oversee the funeral director’s activity in relation to plans.

The FPA cannot regulate funeral directors, nor would we wish to. We also have no interest in intervening in the relationship between plan providers and funeral directors. However, in order to avoid customer detriment without any direct regulation of funeral directors, we expect funeral plan providers to have an appropriate degree of oversight and supporting contractual agreements in place with funeral directors.

The Government has been pressing ahead on the road to Financial Conduct Authority (FCA) regulation of the pre-paid market, and I would certainly expect that as a minimum, the FCA will have a consistent view of the relationship between plan providers and funeral directors in its own approach.

The families you serve are at the heart of our measures – regulation is about ensuring the customer is protected, something the FCA has also made clear. The pandemic has shown how much excellent work independent funeral directors do; the move to a regulated environment is all about ensuring that you and the plan providers you work with can prove that quality and customer focus. It ensures that plan providers and everyone they work with are held to the same high standards.

You can read the full Rules and Code of Practice here.