Because of the prospect of regulation by the Financial Conduct Authority (FCA) the funeral sector has been refocussed on the subject of Pre-need Funeral Plans and client vulnerability.

Sadly, the ongoing effects of the COVID-19 pandemic mean that there are an increasing number of clients that will now be firmly placed in the ‘vulnerable’ category, whether this be through ill -health, job loss or bereavement.

One of our main focuses is on the fair treatment of customers, and it is now more important than ever for all companies within the funeral sector to assess their strategies and approach to Pre-need products available and  to ensure that vulnerable clients are dealt with more carefully than ever and protected appropriately.

Clients that purchase pre-need via funeral businesses and inside the funeral home, are not only approximately 10 years older than those that purchase outside of it, but they are far more likely to be categorised as “vulnerable” when purchasing. The public and regulators have always had concerns about potential poor consumer outcomes due to the fact that people are buying inside the funeral home when they are emotional and at their most vulnerable.

What makes people vulnerable?

There are 4 key drivers which may increase the risk of consumer vulnerability:

  • Life events: major life events such as bereavement, job loss or relationship breakdown
  • Resilience: low ability to withstand emotional or financial shock
  • Capability: clients with low knowledge of financial matters and low capability in other relevant areas such as literacy or digital skill
  • Health: health conditions or illnesses that affect the ability to carry out day-to-day tasks

*The 2020 Financial Lives survey highlights that just under half of adults display one or more of these characteristics.

Selling pre-need products to vulnerable customers

The spotlight of pricing and vulnerability has always been on the funeral sector and is going to be a large part of what the FCA regulation and new policies and procedures will be imposed on funeral planning companies in 2022.

Things have improved massively in the last few years with vastly more demonstrable governance and oversight applied to funeral plans being sold through non funeral related agents and planning companies  so that purchasers can now purchase with full confidence.

The arrival of statutory regulation to the Pre-need market will be unwelcome and very uncomfortable for many Independent Funeral businesses who have not had close oversight in the past.

One of the aspects the FCA will look at is how long-term instalment plans (20/30 years) are sold, whether companies are checking the vulnerability of the client and if they are going to be put into a financial resilience problem as a result. Most clients who buy them over the long term is because they do not have adequate finances and so opt for small monthly payments. Clearly these are the very people who are most financially vulnerable. The danger being that they may be landed in long term debt.

Vulnerable clients need to be protected through the whole sales process

With professional training and decades of experience we can recognise a vulnerable client and we have developed our procedures in such a way that they thoroughly meet the needs of the client.

Purchasing a funeral plan is not an easy decision. It requires having to deal with some difficult questions and decisions, which is why it is best to talk through your needs with someone who is professionally trained in these matters, particularly if personal illness or the death of a loved one has been the catalyst for the purchase. The overwhelming majority of Pre-need sales occur specifically within this vulnerable audience. So, our independence and professionalism is of paramount importance for the protection of our vulnerable clients and to ensure that there is no anxiety through the process.

We ensure the customer experience is from someone independent, fully trained, knowledgeable and sympathetic through what is already a sensitive purchase experience.

We always advise discussing your proposed arrangements with family members and to help the process we have a free funeral planning form. Contact us here or call 0798 883 0691 for more information or just to talk through your circumstances and needs. There is no charge for meeting up.

We can offer Pre-paid plans either on a monthly payment plan or a single payment basis, designed for the funeral YOU want. The funeral is where your family and friend’s memories are made. It will set the way you are remembered for the lifetime of your mourners.