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SYSC 19F.3 Funeral plan remuneration incentives

Application

SYSC 19F.3.1R

1This section applies to a firm carrying on regulated funeral plan activities.

Remuneration and the customer’s best interests

SYSC 19F.3.2R
  1. (1)

    A firm must not:

    1. (a)

      be remunerated; or

    2. (b)

      remunerate or assess the performance of its employees,

    in a way that conflicts with its duty to comply with the customer’s best interests rule.

  2. (2)

    In particular, a firm must not make any arrangements by way of remuneration, sales target or otherwise that could provide an incentive to itself or its employees to recommend or offer a particular funeral plan contract to a customer when the firm could offer a different funeral plan contract which would better meet the customer’s needs.

SYSC 19F.3.3G
  1. (1)

    A firm should consider FPCOB 6.4R and FPCOB 6.5R when making arrangements which concern remuneration or performance incentives.

  2. (2)

    Examples of remuneration arrangements which may conflict with the customer’s best interests rule include:

    1. (a)

      arrangements which provide for higher levels of remuneration based on the price of the plan that is recommended or offered (i.e. higher remuneration for selling a more expensive plan);

    2. (b)

      arrangements for remuneration or performance management which are based primarily on the number of plans sold, or the price of plans sold; and

    3. (c)

      arrangements which do not have adequate provision for remuneration to be taken back if the customer cancels the plan.