Concerns over Funeral Plan regulation

Simplified-financial-advice
Simplified-financial-advice

Article by Phil

As we reported way back in March last year, the regulation of Funeral Plan sales by the FCA is now only a few months away, coming into effect at the end of July this year.

With five months to go some industry insiders are starting to worry whether regulation will have an adverse effect on some customers. So far only just under 60% of firms have submitted their applications for future regulation. The existing voluntary Funeral Plan Authority (FPA) has reported that three well known firms have decided not to submit applications and to withdraw from the market. These are Safe Hands, Eternal Peace and PS cremations. The FPA is concerned that their existing customers might not get the funeral plans they have already paid for if these firms don’t or can’t transfer their clients to another provider.

The Funeral Plan market is relatively small in the UK accounting for about £5 billion and the added costs of regulation by the FCA are expected to push up operating costs significantly, increasing the cost of plans. This has certainly been the case with advice services, with costs increasing more than fivefold over the last few years.

It also seems that very few financial advice firms are intending to seek permissions to advise on funeral plans because of the lack of commissions and the fact that advice clients tend not to need this type of savings plan.

The FCA was asked to take over regulation because of concerns about cold calling and the paying of commissions to introducers which was believed to be leading to “poor” behaviours. These were good reasons but if this affects the number of providers in the market it could have an adverse effect on customers. We’ve seen these types of unintended consequences many times before, for example in the Defined benefit Pension Transfer advice market, where the number of firms has fallen by two thirds and customers now can’t find advisers willing to help them.

Let’s see if anything changes before the 31st of July when the FCA steps in.

If you need any help with probate services just call the office.

 

Inheritance Tax Allowances

What are Frozen Allowances? Christina Clegg Financial Planning Services explains inheritance tax allowances.

If you have any questions about Probate Services please feel free to give us a call on 01282 614444 or drop us an e mail to enquiries@ccfps.co.uk

Awards and Accreditations

Pension Transfer Gold Standard
Investment-Planner
Financial Vulnerability Taskforce
VF 23
Vouched For 2022
Vouched For 2021
Vouched For 2020
Vouched For 2019
Vouched For 2018
Vouched For 2017
Vouched For 2016
Vouched For 2015
Vouched For 2014

Adele, what an easy, straightforward manner you have. It was so good of you to set aside time to look over my finances……you have been kind and concise and I feel a lot calmer. Thank you so very, very much.

Mrs B

Adele was very easy to like from the moment we met her. She always arrives on time, and she has changed our lives in as much as showing us how to enjoy our money more.

Mrs W

Very satisfied! A quick, friendly and professional service.

Mr P