What’s next for the Funeral Plan market?
28 July 2022
On 29 July 2022 the Funeral Plan market will come under the scope of FCA regulation. The market includes providers of funeral plan products and intermediaries who sell funeral plans to consumers. Firms have been preparing for the new regime by applying for authorisation and getting ready to meet the new standards. Some firms may have decided to become an Appointed Representative (AR) of a Principal firm, rather than directly authorised, or an Introducer Appointed Representative (IARs) where they only provide information to customers.
Several firms have decided to transfer their business or wind up, and a small number are still going through the authorisation process. The FCA has already communicated which firms it is minded to authorise and those that are not authorised will need to cease funeral plan business on 29 July.
Meeting regulatory expectations
The first step for regulated firms as part of authorisation, is to set out how they will meet regulatory expectations. This includes maintaining adequate financial resources, meeting the demands of the senior managers regime, monitoring sales and marketing practices, and having suitable complaints management processes. Where firms are authorised as a principal, they also need to show how they will assure the activities of their ARs and IARs.
Successful implementation is predicated on a robust approach to managing risk, good management information and a learning culture. Boards need to ask searching questions to satisfy themselves that risks have been identified and addressed, as well as take responsibility that good consumer outcomes are being achieved.
Once authorised, funeral plan providers and intermediaries will be expected to operate and maintain the control frameworks they have set out. Those that do not may find themselves under FCA scrutiny which can be costly, a blow to reputation and potentially disruptive to doing business.
Staying abreast of the latest regulations
Firms will also need to stay abreast of the latest regulations. The FCA has been consulting on new requirements for Principals of Appointed Representatives which is planned to be published in Quarter 3 2022. In addition, final rules on The Consumer Duty are expected at the end of July and firms will need to get to grips with this so they can implement by April 2023. To help firms better understand the requirements of The Consumer Duty we have written a series of articles which can be accessed here.
How can BDO help?
BDO has an experienced regulatory conduct team that can help newly regulated firms to meet requirements. From extra assurance over control frameworks through to supporting firms with the resources they need.
To discuss how we can help please contact Richard Barnwell.