Solicitors involved in pre-paid funeral work are being sought by the Solicitors Regulation Authority (SRA) for their views on the development of new rules in this area.
The Financial Conduct Authority (FCA) will introduce new rules around pre-paid funeral plans from 29 July 2022.
Activities around such plans will become regulated activities under the Financial Services and Markets Act 2000.
The SRA is now undertaking work to ensure solicitors who carry out work in this area can successfully fulfil the FCA’s new rules.
The introduction of the new rules follows significant growth in the funeral plans market, with 1.5 million currently undrawn, says the SRA.
The FCA is worried by reportedly poor governance by plan providers and financial management, which could leave people without the funds to pay for funeral costs.
Potential options being considered include the SRA allowing firms they regulate to carry out this kind of work under their supervision or for firms carrying out this type of service to be authorised by the FCA for that specific service.
The SRA has launched a discussion paper to seek solicitors’ views on the best approach to take. The regulator also wants an understanding of the scale of pre-paid funeral services provided by firms they regulate.
Tracy Vegro, Executive Director of Strategy and Innovation at the Solicitors Regulation Authority said: “Solicitors provide these services for clients often at stressful times. Pre-paid funeral plans can help reduce some of the stress on families following the death of a loved one by planning and potentially easing costs.
“However there have been times when these plans have not delivered what consumers expected, causing additional upset to bereaved families. We welcome the FCA’s plans to strengthen consumer protection.
“A sub-set of the firms we regulate are involved in this type of work, and we welcome views on the best way to implement the FCA’s new regulations.”
The discussion paper can be found here and is open for comments until 1 June 2022.
Meanwhile, the SRA has stated that its position on the issue will not be finalised until 29 July 2022.
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