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You are viewing the version of the document as on 2023-07-03.

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    2023-07-03

FPCOB 8.2 Demands and needs

FPCOB 8.2.1 R

1The sale of a funeral plan contract must always be accompanied by a demands and needs test.

Demands and needs test

FPCOB 8.2.2 R
  1. (1)

    1Prior to the conclusion of a funeral plan contract, a firm must identify, on the basis of information obtained from the customer and other sources where relevant, the demands and the needs of that customer.

  2. (2)

    When proposing a funeral plan contract, a firm must ensure it is consistent with the customer’s demands and needs.

  3. (3)

    A statement of the demands and needs must be communicated to the customer prior to the customer entering into a funeral plan contract.

FPCOB 8.2.3 G

1A firm may obtain information from the customer in a number of ways including, for example, by asking the customer questions in person or by way of a questionnaire prior to any funeral plan contract being proposed.

FPCOB 8.2.4 G

1 FPCOB 8.2.2R(2) 2 applies whether or not advice is given and in the same way regardless of whether that contract is sold on its own, or in connection with other goods or services.

FPCOB 8.2.5 R

1In determining whether a funeral plan contract is consistent with the customer’s demands and needs, a firm must consider, amongst other things:

  1. (1)

    whether any person has already made provision for the covered individual’s funeral; and

  2. (2)

    the length of the moratorium period during which the contracted funeral will not be provided.

FPCOB 8.3 Ensuring customers can make an informed decision

Disclosing the limits of the service provided

FPCOB 8.3.1 R
  1. (1)

    1In a sale that does not involve a personal recommendation, a firm must take reasonable steps to ensure a customer (‘C’) understands that C is responsible for deciding whether a funeral plan meets C’s demands and needs.

  2. (2)

    If a firm anticipates providing, or provides, information on any main characteristic of a funeral plan orally during a non-advised sale, taking reasonable steps includes explaining the customer’s responsibility orally.

  3. (3)

    A funeral plan’s main characteristics include its significant benefits, its significant exclusions and limitations, its duration and price information.

Means of communication to customers

FPCOB 8.3.2 R

1The information to be provided to customers in FPCOB 8.1 (Demands and needs) must be given in accordance with FPCOB 6.2 (Means of communication to customers).

FPCOB 8.4 Advised sales

Application

FPCOB 8.4.1 R

1This section applies to a firm that provides advice on investments where that advice relates to a funeral plan contract.

Suitability of advice

FPCOB 8.4.2 R

1A firm must take reasonable care to ensure the suitability of its advice for any customer who is entitled to rely upon its judgement.

Suitability guidance

FPCOB 8.4.3 G
  1. (1)

    1In taking reasonable care to ensure the suitability of advice on a funeral plan contract, a firm should:

    1. (a)

      establish the customer’s demands and needs by using information readily available to the firm and by obtaining further relevant information from the customer, including details of existing alternative arrangements by which the customer may reasonably fund the cost of the funeral in question. For example, this could include insurance products, investments, or cash savings, or where the customer has already made provision for the customer or covered individual’s funeral;

    2. (b)

      take reasonable care to ensure that a funeral plan is suitable for the customer’s demands and needs, taking into account its level of cover and cost, the duration of instalment payments, and relevant exclusions, limitations and conditions; and

    3. (c)

      inform the customer of any demands and needs that are not met.

Personal recommendations

FPCOB 8.4.4 R
  1. (1)

    1This rule applies to a firm that provides a customer with a personal recommendation in relation to a funeral plan contract.

  2. (2)

    The personal recommendation must be provided:

    1. (a)

      on the basis of a fair and personal analysis;

    2. (b)

      in accordance with professional criteria, regarding which funeral plan contract would be adequate to meet the customer’s needs; and

    3. (c)

      unless (3) applies, on the basis of an analysis of a sufficiently large number of funeral plans available on the market2.

  3. (3)

    1If the firm’spersonal recommendation will not be provided in compliance with FPCOB 8.4.4R(2)(c), the firm must disclose this fact and the scope of the analysis that will form the basis of its personal recommendation to the customer in good time before the provision of the personal recommendation.

Personalised explanation

FPCOB 8.4.5 R

1Where a firm provides a personal recommendation, the firm must, in addition to the statement of demands and needs, provide the customer with a personalised explanation of why a particular funeral plan contract would best meet the customer’s demands and needs.

Means of communication

FPCOB 8.4.6 R

1A firm must provide the information in this section in accordance with FPCOB 6.2 (Means of communication to customers).