FPCOB 8 Identifying client needs and advising

This chapter applies to:

1. (1)

   a funeral plan intermediary; and

2. (2)

   a funeral plan provider in relation to the distribution of its own funeral plan contracts.

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

1. (1)

   Prior 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.

In 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.

1. (1)

   In 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.

The 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).

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

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

1. (1)

   This 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 market.

3. (3)

   If the firm’s personal 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.

Where 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.

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