From the 29th of July, a little over a month from now, Funeral Planning will become regulated by the FCA, and only authorised advisers will be able to provide advice on Funeral Plans. It’s actually a vitally important subject, despite its sombre nature, and if you continue reading you will see why.
If you look at my website, you’ll find a story all about my mother and Funeral Planning. It’s an important story to read because it’s down to my mum that I offer Funeral Planning as a service.
I’ve been providing my clients with advice on Funeral Planning since 1993 and as I’ve just mentioned, my mum was my first Funeral Planning client. It was not a topic that I ever wanted to discuss with her, but she nagged me to do it for her, and when the time came everything worked so well that I couldn’t help but say, “Well done mum, you were right again”.
Until now Funeral Plans, Funeral Plan providers, and Funeral Plan advisers have been unregulated, and they could be provided by anyone. Some Funeral Plan providers offered unsustainably high rates of commission to attract business and it doesn’t take much working out to realise that commission rates of the order of 25% took a huge chunk out of the value of the fund that was left to provide for the funeral, when required. I have always ignored the high commission rates and completed due diligence on any Funeral Plan provider that I’ve come across, and attended many of my clients’ funerals with a clear conscience.
The FCA recognised the problem and after a period of investigation and consultation they opened the applications for registration on the 1st of September 2021. My application was submitted at 8 am that morning along with the £1250 registration fee and over the coming months I submitted an enormous amount of paperwork that was requested by the FCA in order to qualify for my authorisation.
Of the 70 or so Funeral Plan providers only 26 of them have been provided with authorisation so far and many of the Funeral Plan providers will not be able to operate after 29th July. That includes any Funeral Plans that they have already sold to clients so if you already have a Funeral Plan and you want to know if your Funeral Plan provider has been given ‘minded to authorise’ status you may like to check on the FCA website at fca.org.uk and search for Funeral Plans. Alternatively, simply click the link on my Funeral Planning web page.
Who Are the Regulated Funeral Plan Advisors?
But now for the amazing bit: What about providing advice on Funeral Plans? Which independent financial advisers will be able to provide advice on Funeral Plans after 29th July? That answer is an easy one – there will only be one
And now guess who that person is (no prizes!)? Yes, you’re right – that single, solitary Funeral Plan advisor is me. I am the ONLY Financial Advisor in the country who will be regulated to advise on Funeral Plans. Which I find quite amazing and sad at the same time because this is such an important service, and everyone should have access to this advice.
It’s also notable that several of the Funeral Plan providers have become insolvent because they were not financially viable. In addition, many other Funeral Plan providers have decided to discontinue or amalgamate with others. This means for those who’ve purchased a Funeral Plan from these insolvent or discontinued Funeral Plan providers, they will find that their plan will be transferred to a regulated provider. If you are one of these and you would like some help you know where to come.
I strongly believe that this is an important client service; it’s compassionate and provides help at a difficult time. For example, a client of mine died in January this year at the age of 92. Her husband was also elderly and got in touch with me when his wife died. All it took was for me to call the Funeral Director and within half an hour, everything was being dealt with and there was nothing for the husband to do. He could grieve without the added pressure of arranging a funeral. The funeral went off like clockwork, with her favourite hymns, flowers, readings, and music just as she had asked. You see all wishes are accounted for, the family don’t have the added burden of organising a funeral at a stressful time or worry about payment of the bills, The family also know that the funeral was what the deceased wanted. It’s peace of mind for the deceased and for the living!
During one of my conversations with the FCA, it was mentioned that offering Funeral Planning advice was a ‘loss-leader’, and I immediately objected, stating that I do not see it like that, I see it as a vitally important service to clients.
Over the last 25 years I have provided many clients and my family with Funeral Plans and attending their funerals has been a humbling experience. Now that I have authorisation, I can continue helping them with their Funeral Planning for as long as I am able, or until my family experience my own!
A last word of caution
– beware of insurance plans that claim to cover your funeral expenses: I was horrified to discover recently that one of my family thought that her funeral costs were covered because she had taken out a funeral expenses insurance over twenty years ago. When we examined the paperwork, we discovered that she had paid over £4000 in premiums into the plan and the plan only pays out £2200 on death, which will be insufficient to cover the costs of her funeral. The plan has no surrender value, and she is of an age when stopping the plan is not a good option. If she lives another ten years, she will have paid over £6000 in premiums and her family will receive only £2200 from the proceeds of her plan!
What is worse is that when she passes on there is no actual Funeral Plan in place, the family will have to arrange it and pay for it, obtain a death certificate to receive the proceeds of the insurance, plus cover all the administration in connection with the funeral. This is another example of why Funeral Planning advice is so invaluable. In my opinion having an insurance plan to pay for a funeral is a bad decision so avoid them like the plague. If you have one of these plans in place and would like to discuss your options simply get in touch.