From July 2022, if you provide or distribute pre-paid funeral plans you’ll need to be FCA authorised. The regulator has voiced concerns about pre-paid plans and how they are sold, and has proposed a wide ranging regulatory regime.
Newly regulated firms in the funeral planning sector will have plenty to get their heads around when it comes to FCA compliance. In preparation for being FCA regulated, there are some key areas that funeral plan providers should consider:
Senior management oversight
The FCA will hold senior managers personally responsible for customer outcomes. Are you confident you can demonstrate your governance is up to scratch?
Business models
How are products sold? Could there be conflicts of interest? Are commissions appropriate?
Sales processes
treating customers fairly and keeping them informed is a key part of being FCA regulated, in particular when it comes to vulnerable customers. How will this change your sales process?
Product governance
you’ll need a formal product governance process – how will you determine whether products are fair and offer good value?
Prudential requirements
are your plans backed with adequate trust or insurance arrangements and are sufficient funds available to meet your liabilities? You’ll also need to put in place appropriate wind down plans to protect customers in the event of failure.
Complaints handling
you’ll need a more structured complaints handling processes, with the right for customers to escalate to the Financial Ombudsman Service.
Supporting firms new to FCA regulation
At Bovill Newgate we have spent many years helping firms who are new to FCA regulation build the systems and controls they need to become authorised, and stay authorised. We’ve worked with businesses in consumer credit, claims management, buy now pay later (BNPL), and now funeral planning.
Our experts, having assisted various firms in the sector already from supporting applications for authorisation, providing training to senior management teams and helping senior managers with FCA mock interviews can support in a variety of ways, including:
Monitoring and assurance
• Producing and updating compliance monitoring plans
• Assurance and monitoring, supporting the second line by undertaking specific reviews e.g reviewing case files for sales and complaints
• Development of monitoring and conduct risk MI
Reviewing policies and procedures
• Rolling programmes of development and review – producing new policies and procedures, and updating the existing suite, providing a joined-up view of the whole policy/procedure suite
Training
• Delivering training to staff in a wide range of areas with a regulatory focus, contributing to and supplementing continuous professional development requirements
• Providing specific training on new initiatives and requirements
• Regular briefings and 1:1 sessions with senior management, to ensure they maintain their skills and knowledge as required by the regulator
Project work
• Providing compliance input on project steering groups and undertaking specific projects as required
Regulatory reporting and disclosures
• Periodic reporting and review of disclosures
Horizon scanning
• Providing weekly/monthly reports on regulatory issues
We can also conduct ad-hoc reviews depending on business and regulatory risk exposure or in response to specific areas of concern.
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