In July, the Financial Conduct Authority (FCA) will introduce rules regarding pre-paid funeral plans, and activities relating to such plans will become regulated under the Financial Services and Markets Act 2000. The FCA is concerned about high-pressure sales tactics, high prices, poor governance of plan providers, lack of knowledge of bereaved family members about the plan meaning they are never used, and poor financial management meaning there may not be enough funds to cover funeral costs.
Consequently, the Solicitors Regulation Authority (SRA) is exploring how to regulate law firms that carry out this work by, for example, selling plans on behalf of a funeral plan provider. Options include firms carrying out this work under the direct regulation of the SRA or being required to obtain authorisation from the FCA for this specific service.
Tracy Vegro, SRA executive director, strategy and innovation, said: ‘Pre-paid funeral plans can help reduce some of the stress on families following the death of a loved one through planning ahead and potentially easing costs.
‘However there have been times when these plans have not delivered what consumers expected, causing additional upset to bereaved families.’
The SRA said it will finalise its position after 29 July, but will update firms on next steps in advance. View and respond by 1 June to the SRA discussion paper, Responding to the FCA’s regulation of the pre-paid funeral plan market, published this week.
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