Are funeral plans regulated by the FCA?


May 16, 2017
are funeral plans regulated

The Financial Conduct Authority or FCA as it is more easily remembered is the regulator for 56,000 financial services firms and financial markets in the UK. Basically it is the God of all things finance; so whether you are looking at car insurance or a bank loan, you are protected by the regulations of the FCA.

Having said that funeral plans are not currently regulated by the FCA but there is speculation that this may change in the near future and many funeral plan providers are already changing the way they market and promote their products in line with FCA requirements in advance of any decision, which can only be a good thing for us consumers.  

Even the cheapest funeral plans cost a fair chunk of money though, so if you are committing to a prepaid funeral plan, you want to be certain that your money is safe. After all, the services included in your funeral plan hopefully will not be called upon for many years so in absence of the FCA, exactly what security is there in place to help?

Choose a regulated funeral plan provider

To help safeguard your money, I would recommend that you only ever choose funeral plan providers that are registered with the Funeral Planning Authority (FPA), which is the only UK body that actually regulates the plan providers as opposed to funeral directors.

The Funeral Planning Authority is regulatory body, not a trade or membership body that members can just join. To become a registered member of the FPA, funeral plan providers must undergo the robust registration process to demonstrate that they can operate and comply with their Rules and Code of Practice.

Once achieved, the FPA registered companies who include Dignity, Golden Charter, Avalon and Co-op Funeralcare to name but a few are then tested on an annual basis through the re-registration process.

Other trade bodies

As mentioned funeral plan providers don’t have to be registered with any regulatory or trade body if they don’t  want to but the fact that FPA registered providers are happy to go through the various hoops to prove they have the safeguards in place I think speaks volumes.

I also think it says a lot that the major companies such as Dignity, the Co-op, Avalon and Golden Charter all choose to be registered with the Funeral Planning Authority.

Some funeral plan providers like Safe Hands Funeral Plans and Open Prepaid Funeral Plans choose not to be registered with the FPA which is completely their right but having said that, I notice at the time of writing that Open Prepaid Funerals state on their website that they are currently awaiting their forthcoming FPA membership.

Instead of the FPA, Safe Hands Funeral Plans work in association with the National Federation of Funeral Directors (NFFD) but as the name suggests, this is more about funeral directors than funeral plans.

The money paid for Safehands funeral plans and currently Open Prepaid Plans is invested in a trust fund in accordance with the Financial Services and Markets Act 2000. However as they are not an FPA registered company, they don’t have to comply to the Funeral Planning Authority’s Rules and Code of Conduct in the same way other major funeral plan providers do.

It is also worth keeping in mind that of the small number of funeral plan providers who are not currently regulated by the Funeral Planning Authority, some may not be registered as they have not as yet passed their registration process.

To read more on their Rules and Code of Conduct and to see a complete list of their registered funeral plan providers, visit Funeral Planning Authority website.

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Ashley Shepherd is an Over 50s Personal Finance Expert

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