From July 2022, the FCA will start regulating firms that provide and arrange pre-paid funeral plans. A pre-paid funeral plan allows customers to pay upfront or in instalments for a funeral. These plans may help protect customers against rising funeral costs and help relieve the financial burden on their families.

As a matter of urgency, all firms currently operating within the sector must consider how FCA regulation impacts their business and begin to make the necessary preparations.

Before September 2021, firms need to apply directly to the FCA for authorisation or, if available and preferred, seek to become an Appointed Representative (see below). Applications made after the 1st of November 2021 may incur a higher fee, so we recommend being prepared to submit your application as soon as the system opens. Contact us to see how MEMA can help you prepare and comply with the FCA’s requirements.

You should also be aware of the FCA’s rules and expectations for authorised firms and make the necessary preparations to ensure that those standards can be met once you are authorised. Realistically, this means that firms should begin preparing now in order to ensure that an application is submitted before September 2021.

For those seeking to become Appointed Representatives (other than Introducer Appointed Representatives), there are also considerations in terms of solvency, suitability and whether the Appointed Representative is capable of being effectively supervised by the Principal. This does not apply to Introducer Appointed Representatives. If this is something you would like to explore, contact us to see how we can help you prepare to be onboarded by a Principal Firm.

Firms that do not become an Appointed Representative, or do not apply to the FCA for authorisation, or do apply but do not satisfy the FCA’s standards and requirements, must cease trading in relation to funeral plan activity. Cessation of this activity is required to be achieved in an orderly way and should take effect before July 2022.

The FCA’s rules are currently in draft form during the consultation period which closes on the 13th of April 2021. Whilst these rules are still subject to change, we recommend making the necessary considerations for your business to prepare for this change of regulation. Funeral plan providers and intermediaries will also be subject to the FCA’s supporting rules and requirements, including those brought in under the Senior Managers & Certification Regime.

Appointed Representatives and Principal Firms

If you have been directly authorised by the FCA, you are permitted to onboard Appointed Representatives where you have successfully applied to the FCA for a firm to be authorised for this purpose. Under this form of arrangement, you would act and be known as a Principal Firm. An Appointed representative is a firm that utilises the Principal firm’s authorisation to conduct the same activity/activities as the Principal Firm and with the Principal firm’s oversight.

This arrangement can go both ways, and if you do not want to be directly authorised by the FCA, you may seek out a principal to appoint you as their Appointed Representative. Once appointed, you would be able to conduct a regulated activity without being directly authorised. However, you are answerable to your Principal and often this means an ongoing financial cost.

Onboarding Appointed Representatives requires significant planning and consideration in order to satisfy the FCA’s rules and before an application can be made to the FCA. Principal Firms must also be certain that they meet the FCA’s Threshold Conditions before any such appointment and in order to act as a Principal Firm. MEMA is well versed with these obligations. Contact us to see how we can help.

How can MEMA help you?

If you are unsure about how this change may impact your firm, you can speak with MEMA for a consultation today. We can look at your business and assess what it is you are doing, and if this change affects you. If it does, we can help you to prepare for FCA authorisation, including preparing your application to the FCA and giving you the benefit of our knowledge and experience of FCA regulation to help ensure you have the best chances of obtaining FCA authorisation or to perhaps prepare to be onboarded as an Appointed Representative. Once authorised, we can also help you on an ongoing basis thereafter, providing you with the guidance and support you need to stay informed and confident in your approach.

FCA Authorisation

If you are looking to become authorised by the FCA, MEMA can help.

Each applicant who works with MEMA is assigned a dedicated Regulatory Adviser who will support you throughout your application, answering queries you may have relating to the application and providing you with guidance and support.

The process starts with a fact find between yourself and one of our Regulatory Advisors where we’ll get to know you and your business and how you intend to provide your services.

We will then produce for you a series of documents to support your application and help ensure that you become authorised. These documents include a Regulatory Business Plan and Compliance Monitoring Plan. We also produce a compliance manual for you containing documentation for you to implement into your business upon authorisation to help enable you to comply with the FCA’s requirements.

An online application will then be completed along with all relevant forms, which will then be submitted to the FCA. Should there be any FCA questions, your Regulatory Adviser will work with you to draft a full response.

In short, we’re here for our clients every step of the way. We provide our clients with the benefit of our knowledge and experience to not only help ensure that your application is successful, but that your business has the right foundations to ensure positive customer outcomes.