Funeral plan regulation ‘takes effect’ as pre-need market slows
The pre-need funeral market has increased at its slowest rate since 2005, according to figures released by the Funeral Planning Authority (FPA).
The figures suggested the general downturn in sales volumes is gathering pace – the current 2018 half year statistics stand at approximately 97,000, indicating a contraction of the market of -15 percent from those recorded during the same period in 2017.
The rate of sector growth has slowed since 2014, where the 24 percent increase reduced by 50 percent during 2015. By 2017 this rate of growth had slowed to -1.4 percent.
Commenting on the figures, FPA-approved provider Golden Leaves, said the “robust governance and compliance programmes” initiated by FPA providers had “largely removed any poor selling practices that existed”. The firmed said the sector had gone through a “self-cleansing phase” which was good for consumers and funeral professionals.
It said there were are still “poor behaving fringe operators” but said overall the market had reacted to the increased governance and standards being demanded by FPA providers which led to stabilising of distribution channels across the sector and a correction in sales volume.
Barry Floyd, managing director of Golden Leaves, predicted that for 2018, the sector would see 180,000 plans sold – a market reduction of 13 percent compared with 2017.
Floyd said: “The current downturn is hardly a surprise. I think everyone was expecting it. The market contraction we are experiencing now actually commenced back in 2016. Opinion makers will proclaim that they are responsible for the market correction, but I would like to be quite clear on this point – the main industry players and the FPA have been hard at work increasing operational standards and compliance since late 2015 – early 2016.
“The expected consequence of all this hard work is beginning to show in an anticipated temporary slowing of market expansion.”
He added: “I would expect to see sales across 2019 plateau off at around the 180,000 mark, unless of course HM Treasury comes back with an announcement in Q4 that deliberately or inadvertently distorts the existing market’s framework and irreparably damages sector competition – which obviously could exert further downward pressure to the overall figure.
“Quite clearly, none of that would help the consumer, protect consumer choice, promote competition or keep costs down. It would also do very little to protect the independent funeral industry from the onward march of the large funeral groups. Golden Leaves has made its position very clear on this particular matter; that we welcome any additional regulation that is relevant, appropriate and proportionate to the market.”
