In Autumn 2022, we worked with NAFD to explore Funeral Directors views on the implementation and impact of FCA regulation, as well as their satisfaction with their funeral plan firms.
Overall, we were pleased to see most firms welcome FCA’s intervention as well as their providers response to the regulatory challenges posed (following hot on the heels of a global pandemic and CMA investigation). However, for some the impact of regulation will have been a step too far either deciding to consider a new provider or stop selling plans altogether.
We were delighted that nearly 200 Funeral Director firms took part and in doing so FSE donated £500 to Hospice UK, which was very gratefully received.
The headlines of the survey relating to funeral plan regulation are as follows:
- Despite Funeral Directors accepting the need for regulation, it’s probably fair to say the FCA have not won too many friends with their approach to regulating Funeral Directors.
- Funeral Directors are mostly satisfied with the level of help and guidance they received from their plan providers.
- Funeral Directors do believe however that funeral plans will be safer to buy for consumers.
- Funeral Directors also mostly believe that the ‘cowboys’ have been driven from the sector.
- We see evidence that some Funeral Directors are considering whether to continue selling funeral plans given the level of regulatory requirement – longer term this may lead to contraction in the Funeral Director sold funeral plan sector.
We explore each of these findings further:
Satisfaction with FCA and regulatory help from plan providers
All Funeral Directors in survey were asked:
In terms of communication and introduction of funeral plan regulation by the FCA – how satisfied are you with the consideration given to funeral directors by the FCA throughout this process?
The result was polarising. While more in the survey (42%) felt satisfied, a similar number (33%) were not satisfied. 14% of all respondents were very dis-satisfied. So, an overall +9% positive score but not a resounding endorsement of FCAs approach.
Funeral Directors were generally very satisfied with the level of regulatory support received from their plan providers, with an average satisfaction score of 8.2 (out of 10). Given the extent of work required on all sides, this seems a good result for the sector as a whole. Albeit 7% rated a low score of 4 or below, suggesting that some Funeral Directors had a very negative experience.
A safer funeral plan market – with less cowboys
Despite some dissatisfaction with FCA approach, there is however a good degree of validation for the outcome of what the FCA set out to achieve. 82% of all Funeral Directors agreed that it will be safer to buy plans now FCA regulate the sector. Just 6% disagreed with this statement.
It will be safer to buy funeral plans now FCA regulates the sector
It will be safer to buy funeral plans now FCA regulates the sector
And 69% of all Funeral Directors agreed that FCA regulation has got the ‘cowboys’ out of the funeral plan sector. Interestingly though 12% of all Funeral Directors disagreed with this statement and 19% neither agreed/disagreed or didn’t know, suggesting that while the likes of Safe Hands have been removed, there is more work to do to make the sector even safer.
Funeral Directors considering whether to sell funeral plans longer term
Levels of regulation and red tape leave some Funeral Directors saying they have or will quit the market because it is too onerous, leading to the prospect the market becomes smaller for funeral directors.
21% of all Funeral Directors agree that ‘it’s now more trouble than it’s worth to sell funeral plans’. Some do see opportunity however, whether that be in how they feel regulation will positively impact their business, that they may switch provider or even in how they can create and sell their own funeral plan. Overall FSE observes 1 in 10 Funeral Directors would consider switching or setting up their own plan.
We also asked participants to give us their views on service and satisfaction levels from their funeral plan provider across a wide range of disciplines. Results suggest three quality players in the independent funeral plan market, with one clear leader of the pack ahead of an established provider with strong pedigree and a (relative) newcomer clearly looking to challenge the status quo.