FPCOB 11.1 Application and purpose

The Consumer Duty requires a firm to act to deliver good outcomes for retail customers. A firm is also under an obligation to comply with the customer’s best interests rule and, as a consequence of this sourcebook’s customer communication requirements, to communicate information to customers in a clear, fair and not misleading way. This chapter reinforces these requirements by preventing a firm from imposing fees which amount to profit.

For the purposes of FPCOB 11.1.4R(2), ‘lost investment gain’ refers to a reasonable estimate of the difference between:

1. (1)

   the investment return that instalment payments under an instalment payment funeral plan will make when invested under the trust arrangements or insurance-based investment products over the period of time that instalments in that plan are agreed; and

2. (2)

   the investment return that would have been expected from the customer’s payment if the customer had paid for the funeral plan contract in a single payment at the date the funeral plan contract was entered into and that payment (less any charges or deductions the firm would ordinarily have made) had been invested under the trust arrangements or insurance-based investment products for the period of time used when estimating the amount in paragraph (1).