The Funeral Plan Comparison Sham
OK, let's get something straight right from the very start.
There's no such thing as a funeral plan comparison site. Not one that's actually designed to benefit the consumer at least.
The prepaid funeral plan market is in very grave danger of becoming the next big financial scandal. The FCA (Financial Conduct Authority) have recently instigated a consultation with a view to formally regulating the industry. Having met with them personally in the last few weeks it's clear they plan to formally regulate prepaid funeral plans, and that they currently have little or no interest in the FPA (Funeral Planning Authority) becoming anything with any actual power over the industry. Based on my meeting with them they are currently not supportive of the FPA becoming a statutory body. I think that could be a shame - an FPA with control nearer that of full FCA regulation but with the experience and knowledge of the funeral and funeral planning industry could, perhaps, be the way forward. But ONLY if there's transparency and disclosure in relation to fees and commissions. After all, we're a financial services business aren't we?
The problem with funeral plan comparison sites, and there are now a great number of them, is that the people operating them aren't driven by what's the best product available to consumers, but are instead driven by which plan provider pays them the most commission. And how much are they being paid? Between £500 and £800 in commission from what the consumer pays for their funeral plan.
So how does it work?
There are two types of funeral plan comparison site. One that generates sales either through their own sales team or by delivering leads to an outsourced sales team. The other sites are those that generate leads only and sell your enquiry for £25 to £50 to a funeral plan sales house which then receives the commission from the plan provider.
In either case, the sale of a funeral plan is being driven by the commission being paid, and not by what's best for the consumer. That's why you'll never be offered an Open funeral plan through one of these sites. Open don't pay any commission to anyone for selling their plans.
If you buy an Open plan, whether directly from us or through an independent funeral director, you pay an administration fee of £195.00 for the life of the plan. 100% of the balance is paid into the Open Prepaid Funerals Trust Fund, no further deductions are taken from your plan value before its nominated to a funeral director. That means that if you pay £3,550.00 for an Open plan, your plan value starts at £3,355.00. That's far from the case with almost every other provider.
- Posted 30th August 2018