James Baker on Funeral Plans: Walk Don’t Run

Remember fire drills at school? The wisdom behind the exhortation to “Walk, don’t run!” was often lost on me and my classmates. When your age matches your shoe size your chain of logic rarely extends much further than: “Walk? If there’s a fire in the building I’ll be running just as fast as my little legs can carry me, thank you very much.”

It’s only as you start maturing that you learn to appreciate the inherent dangers of mass panic and equally how, even if you’re only in a stampede of one, your chances of sprinting to safety could still be severely hampered by tripping up and falling flat on your face as imminent doom thunders up behind you.

There’s an urgent need for funeral professionals to start demonstrating a similar type of mature, clear-headed thinking around the increasingly contentious issue of funeral pre-payment plans.

Currently the very mention of pre-payment plans is enough to send us scattering in all directions: non-believers like me are moving calmly towards the emergency exits; whilst others have succumbed to smoke inhalation by breathing in the plan providers’ marketing hype and turning into Corporal Jones’s – “Don’t panic!” and Private Frazer’s – “We’re doomed!” before surrendering themselves to the forces of self-fulfilling prophecy.

Meanwhile, a disturbing number are ignoring the other golden rule of fire drill by running into the flames hoping to salvage what they can, convinced they can still make it out alive.

Funeral directing is a constant balancing act, challenging its best practitioners to act honourably and honestly in deliver a caring, personal service in a commercially sustainable way. But this delicate Eco-system is under threat from pre-payment plans. Far from bringing ‘peace of mind’ to forward-thinking consumers, pre-payment plans are actually bringing malignant levels of commercialism and unsustainability into what has always been an acutely sensitive marketplace.

There are so many different kinds of bad embodied within the concept of the funeral pre-payment plan that it’s difficult to know where to start. From the purchaser’s point of view, pre-payment plans don’t really do what they say on the tin. The vast majority of plans only offer a partial guarantee, freezing the funeral director’s fees but treating the amount paid towards third party costs as an allowance requiring a supplementary payment at the time of need. Although the plan holder assumes their funeral is bought and paid for, their relatives still find themselves with extra to pay.

By the same token, the actual ratios of financial growth as set against inflation render the majority of pre-payment plans hopelessly uneconomic for the funeral directors who will one day be responsible for carrying out the funerals. These abysmally low rates of return were one of the many reasons I began setting off the smoke alarms, the realisation dawning very early on that pre-payment plans all come with the smell of burning. Since then it’s come as no surprise to me to hear increasing amounts of evidence that funeral directors are resorting to corner-cutting and/or raising prices for their at-need clients simply to subsidise loss-making pre-payment plans.

From the perspective of the pre-payment scheme providers, financial sustainability is equally fraught, because it can only be achieved through maintaining sales volumes. I’m not suggesting that plan providers are running ponzi schemes, but the simple fact remains that they rely on sales volumes to fund returns for their participating funeral directors. This not only leaves funeral directors dangerously exposed to unquantifiable future risks (bearing in mind the plan providers themselves get their money at the time of sale), it also requires an aggressively proactive approach to selling.

The pre-payment scheme providers play on the herd instinct, stoking an artificial sense of panic: “Attention funeral directors: if you don’t sell enough plans your competitors will take your future market share.” However, the providers face a fundamental problem: good funeral directors make very bad salesmen. To combat this, the providers have resorted to using direct marketing and third party sellers, along with cajoling funeral directors into somewhat dubious marketing activity: retirement seminars become opportunities for exploiting captive audiences; the over-50’s are hounded at every turn and bowls match sponsorship is getting like Formula One and tobacco. This has resulted in the funeral profession being reduced to ‘buy now, die later’ commercialism.

Third party selling has also corroded the essential relationship between plan purchasers and their intended funeral director. While pre-payment providers and their sales agents take the money and run, plan holders and their families are left with misinformed and grossly underfunded expectations; meanwhile long-established, reputable funeral directors are amassing ever-growing financial liabilities with consequent risk to their long-term future, all courtesy of a fundamentally ill-conceived product being mis-sold on their behalf.

I’m all for folks leaving a record of their funeral instructions; and if they want to set the money aside too then all power to their collective elbows. But my advice would be to put those instructions somewhere safe, or better still distribute copies to trusted representatives, and put the money into a savings account or an ISA, where THEY keep control of it – topping it up periodically if they so wish. Their family (and their funeral director) will love them for it. But more importantly it will keep their money away from the hands of the financial products sector, whose self-imposed contribution to the funeral market is at best questionable and at worst brazenly parasitic.

James Baker

(a Gloucestershire funeral director)

This article was orginally published in More to Death, the official magazine to The Natural Death Centre.

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