08Sep

The date on which the Financial Conduct Authority takes over as regulator of the funeral plan sector is now less than one year away. Ahead of July 29 2022, there is a great deal that firms in this sector should be doing in preparation. 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, all of which can be made far easier by partnering with Scott Robert and our team of highly experienced Regulatory Advisors.

Funeral plan providers must obtain direct authorisation from the FCA prior to this date in order to continue trading. Funeral plan intermediaries can choose to either become directly authorised, or to become an appointed representative. Appointed representatives are firms that are not themselves authorised by the FCA, but which are supervised by another firm which is authorised.

Applications for authorisation should be made on the FCA’s Connect system. The regulator urges applicant firms to make sure that they supply all requested information, as failure to do so will result in delays to becoming authorised. Scott Robert has the experience to ensure for you that all required information is included in your application.

Some of the things an applicant firm must evidence include:

  • It is willing and ready to be authorised by the FCA
  • It has products, processes, systems and people that meet the FCA’s regulatory standards
  • It will be able to satisfy the FCA’s Threshold Conditions – a set of basic requirements that must be met by all firms in all sectors regulated by the FCA
  • Its senior management can satisfy the FCA’s Fit And Proper Test
  • It will be able to satisfy the Principles for Business – the high-level rules that all firms must satisfy

Other issues that applicant firms must consider include:

  • Which permissions they need – if a firm applies for more permissions than it needs, then it may delay the authorisation process. Basically, a firm can either apply for permission to provide funeral plans or to administer them under the new FCA regime
  • Under the FCA’s Senior Managers & Certification Regime, an important part of any authorisation application is to evidence the honesty, integrity, reputation, competence, capability and financial soundness of key members of staff. An application must clearly explain how and why individuals in key roles were selected, based on their relevant experience, as well as the scope of their regulatory responsibilities
  • A key part of any authorisation application is a regulatory business plan. This is not exactly the same as a normal business plan that a firm might produce when seeking investment, instead the FCA expects a document that explains how the firm will comply with regulatory obligations on an ongoing basis, and how they will manage risks
  • The FCA will want to see copies of agreements with key service providers
  • Firms must demonstrate that they have considered any potential conflicts of interest and should explain how they intend to manage or mitigate these conflicts
  • Any firm that is seeking to become a principal firm, i.e. a firm that will supervise one or more appointed representatives, must prove that they have systems in place to supervise these ARs effectively

Firms which 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. Don’t let this be your firm, if you are unsure about how this change may impact your firm, 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 the guidance and support you need to stay informed and confident in your approach.

Scott Robert has been supporting firms through the FCA compliance process since 2008. In that time, we have helped hundreds of businesses to successfully gain and retain FCA authorisation.

We employ a team of compliance professionals who are both highly experienced and expertly skilled. We specialise in providing our clients with solutions to often complex regulatory requirements and compliance needs.

Our knowledge of FCA compliance enables our team to support you and your business, provide effective solutions to any problems you face and help you to devise and implement strategies that work for your business and your customers. Conducting regulated activities without the correct authorisation is a criminal offence, speak to one of our experts today for confidential and no obligation advice regarding FCA authorisation.

Speak to one of our experts today for confidential and no obligation advice by calling 0161 413 2796 to find out more.