Regulation and the funeral industry are like the proverbial bus. Nothing for years (not ever, in fact) and then two sets of regulation come along at once. The funeral profession has come under the scrutiny of the Competition and Markets Authority (CMA), whilst funeral pre-payment plan companies are facing regulation by the Financial Conduct Authority (FCA).
The FCA will be regulating funeral pre-payment plans from 2022, and not a moment too soon in my view. The pre-payment plan market has become like the Wild West, due almost entirely to an exponential rise in direct marketing and commission selling. The FCA will be doubling down on dodgy sales practices, but more importantly they have also set their sights on the actual financial mechanics behind funeral plans. Funeral pre-payment plans are a fundamentally flawed concept and the only way they can continue to exist is if someone is willing to carry the financial liability, and that someone is invariably the funeral director. To a very large extent that’s the fault of funeral directors for collectively tolerating it. But as I see it, one of the effects of FCA regulation will be to take the ‘magic thinking’ out of funeral plans and in so doing reduce what is currently a vastly overheated market into something commercially tepid. The plan-buying public and funeral directors alike will all benefit from that.
Not nearly so useful though, is the altogether more ham-fisted intervention of the Competition and Markets Authority into the funeral profession, which has resulted in the Funerals Market Order 2021. The CMA’s contention is that there isn’t enough price transparency in the funeral profession. That view is correct only in the sense that there is still fear amongst some funeral directors that if they publish their prices online then their competitors will immediately set about undercutting them. Or that it’s just too complicated to publish prices online anyway, because individual funeral arrangements vary so much that it would be like trying to define the length of a piece of string.
I have sympathy for both views, but ultimately all that is required is to have the courage of our convictions. There is a financial and human cost to running any business – and our prices have to reflect that. My firm has published its prices online for some years now, but I know that our standards of service are excellent and our prices are fair and reasonable and very much in line with the prevailing average. So if someone wants to undercut us then good luck to them. All they’ll end up doing is racing themselves to the bottom. There’s a huge amount of work and commitment involved in being a funeral director and after 30-odd years of doing it I’ve learnt to do it very well. But if a prospective client is only interested in what it’s going to cost them I’m probably not the funeral director for them anyway.
The truth of the matter is that the CMA have arrived at the party about 20 years too late; and they’ve blundered in wearing fancy dress when in fact it was a black tie bash. But arrived they have, and they’ve come armed and ready to tilt at every windmill they can find. Walk into just about any funeral director’s premises in just about any town and you’ll be treated with courtesy and attention and a genuine willingness to try and meet your needs, whatever they may be. But from 16th September 2021, walk into any funeral director’s premises in any town and you’ll be confronted with a copies of a CMA-mandated ‘Standardised Price List’ stuck to the window and also displayed on an A2 size poster in the reception area.
I’m sure most FD’s will find a tasteful way of complying, because if they don’t then their reception areas will resemble a McDonalds, or a chip shop. But worse than that, the template the CMA requires us to use for these standardised price lists is very ill-conceived and will do nothing to help people understand what it is they’re actually looking at. The two main trade associations for the funeral profession (who’ve been pressing their members about online pricing for some years) both offered to work with the CMA in drawing up a standardised price list that could be used by funeral directors right across the UK. But the CMA ignored those offers and went its own way. They were offered a sewing pattern, but instead they’re expecting the funeral profession to make a purse out of a sow’s ear.
Funerals are expensive. They are labour-intensive, require a lot of specialist equipment, resources and time. So does open heart surgery, but because the NHS doesn’t submit an invoice for that (it goes to the ‘taxpayer’) no-one jibs about the price. (Or the ultimate cost to the ‘taxpayer’). Engaging a funeral director, or a surgeon, cannot just be about the price. It also has to be about the standard of service. And when people do complain, it’s almost invariably because of bad service. Or bad service when set against the price charged. But the CMA seem determined to reduce funerals to a bald financial transaction.
The reality on the ground is that there is far greater price transparency in the funeral market now than there’s ever been. That’s due in very large part to the internet. (Which is why the CMA are zeroing in on having funeral directors put up posters and window displays, of course…) Most people know roughly what they’re going to be in for and they certainly seem to know which firms are the expensive ones in their locality. But equally, people nowadays want to personalise their loved ones’ funerals and they’re choosing to spend more on optional extras than they ever have before. So what exactly are the CMA setting out to achieve? Answers on a postcard please. Or an A2 size poster.
James Baker is a funeral director and the author of ‘A Life In Death – Memoirs of A Cotswold Funeral Director’ (2012) and ‘The Unmourned’ (2020)
