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FCA approves funeral plan providers covering 87% of market

FCA approves funeral plan providers covering 87% of market

The Financial Conduct Authority has approved a list of funeral plan providers which cover approximately 87 per cent of existing customer plans.

The regulator today (June 17) published a list of providers it intends to authorise when the pre-paid funeral plans industry comes under its remit on July 29.

The full list has 24 firms and the FCA said providers will be officially approved for authorisation in July, depending on whether they have fulfilled certain obligations outlined during their application process.

For the small number of firms that are still being assessed, it said this did not necessarily mean the FCA had concerns or that they would not be authorised when regulation begins. 

FCA executive director of authorisations Emily Shepperd said: “As this sector approaches regulation, we want to provide holders of pre-paid funeral plans with some reassurance, which is why we have published a list of the firms we intend to authorise.

“Our regulation will lead to higher standards in the market and boost consumer protection. We want to see an improvement in the way customers are treated, with better value products, better sales practices and better controls in place so consumers can be confident they will receive the funeral they expect.” 

The City watchdog said it was still assessing a small number of providers’ applications and would give an update on these as soon as possible.

Until regulation comes into force, all of the providers in this market remain unregulated, meaning customers do not have access to the Financial Services Compensation Scheme and the FCA has limited powers.

The FCA said it was working with the industry to find longer-term solutions for customers of providers which have not applied for authorisation or have withdrawn.

From July 29, all funeral plan providers will need to follow new FCA rules, which include a ban on cold calling and commission payments, as well as changes to appointed representative permissions and high standards on governance and financial resilience. 

Funeral plan holders will be able to refer complaints about a firm to the ombudsman and will be covered by the FSCS if their provider goes out of business.

Last month, advisers cited mixed views on pre-paid funeral plans coming into the FCA’s remit.

sonia.rach@ft.com 

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