In a submission to the Competition and Markets Authority’s consultation on the scope of a funerals market investigation, the National Association of Funeral Directors has confirmed that, while it is pleased that the CMA is considering extending the scope to include the delivery of funeral services arising from the redemption of prepaid funeral plans, it would like to see the CMA go further and include all interactions between funeral plan vendors and consumers within the scope of the investigation.

In the response, submitted on 13 March 2019, the NAFD  agreed with the CMA’s preliminary view that the financial and prudential aspects of prepaid funeral plans (ensuring the financial stability of funeral plan providers) should not be included in the scope of the CMA’s investigation and should remain within the current HM Treasury review of whether the funeral plan market should be brought under the regulatory remit of the Financial Conduct Authority. This is because the financial and prudential operation of the funeral plan market bears significant resemblance to that of the wider financial services market.

However, the NAFD expressed concerns that, in suggesting that the marketing and sale of funeral plans should fall outside of the scope of any potential CMA investigation, the CMA may not have fully understood the key differences between the sale of a funeral plan (the purchase of a specific funeral service, in advance) and the sale of a financial product (in which the value of the return may vary, or the plan may never be redeemed).

NAFD Chief Executive Jon Levett said: “There are now more than 1.3 million people with a funeral plan. More than 207,000 Britons bought one in 2017, and 90,000 of those already held were redeemed after the plan holder died. With funeral plans now accounting for such a significant proportion of the funeral services market – and given the negative impact of poorly sold funeral plans on bereaved consumers and the funeral directors trying to service the plan – it will not be possible for the CMA to fully understand the funeral market without taking the marketing, sale and redemption of funeral plans into account.

“Failing to include the entire transaction in scope would create an investigatory blind spot, which would significantly restrict the CMA’s ability to gain a full understanding of the funeral services market and consumer risks within it.”