Why funeral directors should offer prepaid funeral plans

Historically, funeral directors have offered prepaid funeral plans to their communities on behalf of a third party provider who have mainly controlled the prepaid market, up until now.

Most funeral directors have known it is possible to set up their own trust where they can own and operate prepaid plans but with the complexities in doing so, most haven’t got past a solicitor. Funeral directors need to wake up and smell the coffee because they need to realise that by operating their own trust, it is them that will reap the rewards and not the providers.

A little bit of background

This is where CPS Trust Consultancy can assist in being able to offer this service. Over five years ago Chris Stuart, founder and MD of CPS, was involved in the setup of a major provider company for prepaid funeral plans which has subsequently been sold to investors as it required significant investment; it now has a multi-million pound turnover. The combined experience and knowledge gained through this process allowed us to establish CPS Trust Consultancy. What makes us unique is that we offer the full end-to-end business model in providing all the professional services necessary for setting up the trust to include the solicitors, actuaries, trustees, accountants, fund managers and bankers together with all marketing and work flows along with structured time-efficient meetings in relation to the trust; ensuring that very little of a funeral director’s time is taken up when it comes to running the trust.

Capping your set up costs

In the past the whole business was shrouded in secrecy when trying to find a solicitor to write the trust, finding an actuary who was prepared to deal with a new contender in the business, through to finding a professional trustee, accountant and fund manager that wasn’t going to charge a huge amount in fees for research and implementation. CPS Consultancy have now negotiated fixed costs with all the professionals, it has a robust business model that has been tried and tested and been approved by the solicitors, actuary, trustee. For the first time, a company is able to offer the opportunity for even relatively small funeral directors to have and operate their own prepaid funeral plan trust with all the financial benefits that go with it.

You could be giving away profit

Profit is a driving force in having your own trust and any funeral director who has the ability or is already writing up to 100 prepaid funeral plans per year would qualify to have one. The other main factor would be the value and profitability of their business; this would instantly increase from a prospective purchases point of view as they will see the FD as the owner of the prepaids in their own trust rather than in the ownership of the provider; this being a major contributor to the valuation of a business.

If a funeral director sells funeral plans on behalf of a provider, then it is widely known that the average administration fee taken from the plan is £250. If they generate 100 prepaids annually then instead of throwing away £25,000, that money could be theirs. If they are accepting prepaids from a provider as a nominated funeral director then as well as admin fees, hefty commission and marketing costs might also be deducted. Another benefit is the trust itself, as the growth in it is theirs. Any return over CPI can be drawn out or taken on provision of a funeral.

Companies, like Dignity, heavily rely on their pre-paid funeral plans for revenue and future profits; if you analyse their financial reports, you see they would find it hard to survive without their prepaid funeral plan division, so it makes you wonder what chance the independents have moving forward.

How do we see your future?

Some providers are predicting that over the next seven to 10 years, 50 percent of funerals will be prepaid and if the providers are right, then funeral directors need to anticipate what lies ahead and start taking back control. There are several channels available for the consumer to purchase a prepaid funeral plan but because the method of selling is under current scrutiny this, in our opinion, puts the funeral director in the driving seat as you would assume the public to entrust their local funeral director as opposed to a faceless reseller. By the same token, it surely makes sense for the funeral director to promote their own prepaids so they can offer their communities a full end-to-end service.

Our passion truly comes from helping funeral home businesses prosper and we feel that this opportunity will not only level the playing field as regards prepaid funerals plans but build stability for the independent funeral directors nationwide. We at CPS would like to think we can revolutionise the prepaid funeral plan market and we would like to invite the funeral directors who want to be part of the revolution.

However, we understand our offering is not for every funeral director hence a need to have an initial conversation for any questions a funeral director may have; we offer a free 30 minute no obligation phone call and then, if it looks possible you could qualify for a trust, a free no obligation 60 minute meeting at your funeral home.

Take some action today…it’s worth a chat

We travel around the UK visiting funeral directors at their funeral homes, so if you require a funeral home visit or simply a call, contact Chris Stuart on 08000 197 133, visit www.yourowntrust.co.uk or email enq@yourowntrust.co.uk