FPA response to the HM Treasury consultation on funeral plan regulation
The Funeral Planning Authority has now responded to the HMT Treasury consultation 'Pre-paid funeral plans: call for evidence', with our submission issued at the end of July.
As previously stated, the FPA has welcomed this consultation, as a means of identifying key issues in the market, and working out potential solutions for them. We also believe that the consultation will show how effective the current regulatory regime is, under the FPA.
Ours is a relatively small but growing market, with the vast majority of providers within the market subject to FPA regulation. A small number of providers operate outside that regime and are therefore not subject to external scrutiny. This undoubtedly opens up the opportunity for poor behaviour.
Statutory FPA regulation is the right way forward as provides customers with the best solution in terms of oversight, cost, competition and market understanding.
The suggestion of FCA regulation is very difficult to evaluate as there is no explanation of what it actually means. However, we do know it will be costly, take time to implement and impact competition with an adverse impact on smaller, regional firms and the ability of funeral directors to be active participants in the market. It is also clear the FCA do not regulate any similar products which are the pre-payment for a service rather than a financial investment. There is also little clarity on what FSCS coverage would mean for customers.
The FPA would like to see the government take immediate positive action; recognising that customers who buy funeral plans benefit from choosing an FPA registered provider, and should always look for FPA registration. We are committed to spreading this message to help inform, reassure and empower customers who have either purchased or are thinking about purchasing a funeral plan.