JEFF PRESTRIDGE: Finally, the market for prepaid funeral plans is properly regulated – hopefully we won’t have to turn the spotlight back on…
It’s been a pretty rough ride, but finally, the prepaid funeral plan market is now properly regulated.
Since Friday, he has been under the eye of the Financial Conduct Authority (FCA). This means plan buyers can now be sure they’re not getting a raw deal – and that the product will do exactly what it says on the tin. That is, to pay for the funeral they purchased in advance.
Twenty-six companies have reached regulation. A few (notably Safe Hands Plans and Unique Funeral Plans) have folded while many others have outsourced their plans to rivals.
Do you rest in peace? : plan buyers can now be sure that they are not receiving a raw offer
Thirteen companies that failed to obtain authorization have until the end of October to transfer their project to a competitor or refund customer premiums.
About 2,000 “designated representatives” of the 26 regulated companies will be authorized to sell plans. Most are funeral directors. Buyers will be able to check their credentials against the FCA’s list of regulated companies. If their contact information is not on the registry, avoid them like the plague.
On Friday, the FCA assured me that its regulation of the funeral plan market would lead to “higher standards” in the industry and “strengthen consumer protection.”
He stressed: “We expect an improvement in the way customers are treated, with better value for money products, better sales practices and tighter controls in place so consumers can be sure that ‘they’ll get the funeral they’ve been waiting for.’
The regulator has done a good job of separating the wheat from the chaff. But his work has only just begun.
He must now ensure that no one ever again has to go through what 46,000 Safe Hands customers just went through – being told that their plan is worthless due to corporate greed and wrongdoing.
This newspaper has led the way in exposing the shady world that was the pre-FCA funeral plan market – a fact acknowledged last week by provider Golden Charter who thanked us for “The Mail on Sunday’s involvement during the last year”.
I hope we don’t have to turn the spotlight back on.
More stable Eddie than gung-ho
The Personal Assets investment trust is an essential asset. Managed by Troy Asset Management, it strives to both preserve and increase the value of investors’ wealth. More Steady Eddie than gung-ho – invest in gold, bonds as well as stocks.
A fund for all seasons. Over the past year, it has maintained its stock value while other high profile funds have crashed to the proverbial low.
Tomorrow, the £1.8bn fund, listed on the London Stock Exchange, will make itself even more attractive to investors – new and old – by carrying out a share split.
Existing shareholders will receive 10 shares for each one they currently hold, with each new share valued at one tenth of the price.
The overall shareholder fund value will not change, but it will allow the shares to be more easily traded by private investors. Instead of being priced at around £490 each, they will trade at £49, making it easier for new investors to buy them through regular savings plans.
It’s a smart move on the part of the trust, even though they should have made this change a while ago. Personal assets can be purchased through all major investment platforms, as can defensive trusts such as Capital Gearing, RIT Capital Partners and Ruffer.
Lower loads should be the order of the day
Speaking of investment platforms, it’s good to hear that Interactive Investor continues to lower fees.
From early September, the cost of buying and selling shares, investment trusts and exchange-traded funds through the platform will drop from £7.99 to £5.99.
This means its trading fees will be lower than its rivals – notably Hargreaves Lansdown – although Interactive is unusual in charging a monthly subscription fee, ranging from £9.99 to £19.99 depending on the service required .
“Investors can’t control the markets, inflation or interest rates,” Richard Wilson, head of Interactive, told me. “But they can control their investment costs.”
Spot on. Lower fees should be the order of the day. It’s time for Hargreaves to follow suit.
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