NAFD welcomes FCA consultation on funeral plan sales regulation
The NAFD has responded to a consultation paper issued by the Financial Conduct Authority which sets its draft rules and approach to regulation of funeral plan providers.
Through the new rules, the NAFD is looking to ensure that funeral plan companies are required to:
- communicate more clearly with the consumer regarding where and how funeral plan funds are invested
- be transparent regarding the value of any fees and sales commissions attached to the plan
- inform funeral directors when a plan is being sold with their name against it as nominated funeral director, and have the opportunity to agree the terms and for their decision be confirmed to the family before the standard ‘cooling off’ period ends
NAFD Chief Executive Jon Levett said: “The NAFD welcomes the introduction of statutory regulation to the funeral planning market.
“Around 200,000 funeral plans are bought by consumers each year and, given the negative impact of poorly sold funeral plans on both bereaved people and funeral directors trying to service the plans, this move will help to protect consumers from unscrupulous sales tactics and ensure that consumers can feel confident they are purchasing funeral plans that will cover the cost of the funeral they have chosen.
“We welcome the consultation as an opportunity to ensure the new regulatory framework will now be developed by the Financial Conduct Authority, is suitable and proportionate for what is a very small, niche market with a very different kind of product to other financial markets.”
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