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Policy Brief and Recommendations as submitted to the Department of Trade & Industry - April 1998

PREFACE

The purpose of this document is to set out clearly the National Society of Allied and Independent Funeral Directors' position on a number of issues of genuine concern. It also offers recommendations to help establish a framework to unite the entire funeral profession under one comprehensive and effective code of practice to the benefit of the bereaved and the profession alike.

The National Society of Allied and Independent Funeral Directors

National SAIF (more commonly known as SAIF) was formed in 1989 to uphold the traditions and values expected of our profession and to promote, protect and improve the high standard of service offered by independent funeral directors. At that time, many independently owned funeral companies had become concerned at the changes that were rapidly taking place and felt the structure of the long established National Association of Funeral Directors was unable to tackle effectively their growing concerns entirely objectively because they were also representing certain multiple groups. Since its formation, SAIF has gone from strength to strength and is now growing rapidly with nearly 700 nationwide members as of January 2000 through almost 1,000 funeral homes. Most of SAIF's members are long established and include many of the most respected funeral directing businesses in the UK. SAIF can now legitimately claim to be the true voice of the independent funeral director as the Society currently represents more outlets than either Service Corporation International UK's (SCI) 560 offices or the Co-op's 800. Key membership benefits include:

A strict code of practice drawn up in consultation with the Office of Fair Trading

A successful procedure for dealing with complaints through our own Standards Committee and Independent Funeral Director Arbitration scheme

A commitment to education and training, maintaining and progressing quality and high standards through the Independent Funeral Directors College

An independent voice offering real support and influence on all major issues

A comprehensive package of practical Benefits including highly competitive products and services for all members

A monthly magazine 'SAIFinsight' keeping members abreast of developments

Over the last few years SAIF has taken the lead role in standing up on key issues of moral and ethical concern that affect a bereaved families' choice of funeral director. Accordingly, SAIF sponsored the setting up of the Campaign for Fair Funeral Practices, which was launched in September 1997 to endorse and progress the established values and traditions of the UK funeral profession under threat by the arrival of significantly more aggressive, and questionably less ethical techniques, primarily operated by conglomerates. SAIF strongly believes and has proved it is committed to:

Enforcing the Society's code of practice through its Standards Committee

Respecting bereaved families' vulnerability at all times

Allowing, through the Independent Funeral Directors College, all members to have the opportunity of ensuring they are fully competent in all aspects of the profession and in tune with current trends

Giving full and transparent information to the public on all aspects of bereavement

Offering complete freedom of choice to the public

SAIF supports a Single Code of Practice SAIF supports fully the idea of a single code of practice for the funeral profession, particularly as this would give the public a uniform standard by which they can then assess their funeral director.

The National Association of Funeral Directors launched the first code within the funeral profession in March 1979 in consultation with the Office of Fair Trading. The code in its entirety then formed part of the bye-laws of that Association. One of the most significant parts of the effectiveness of that code was in the wording that preceded it:ø "Members of the National Association of Funeral Directors agree to honour the spirit and provisions of the code" That statement was clearly designed to ensure that all members subscribing to it had a duty to accept it in its entirety. For a number of years it clearly achieved its aim. Unfortunately, more recently, the spirit has, in SAIF's opinion, been overlooked and the code has been interpreted with a narrow technical/legal approach that has deprived it of much of its force.

When it was founded in 1989 SAIF, in consultation with the Office of Fair Trading, launched a similar code of practice which also now addresses the important issue of pre-payment funeral plans. We believe our code is effectively policed via our Society's Standards Committee and that our members know the importance of strictly adhering to it. Presently, SAIF members also comply with the Funeral Planning Council's code of practice.

This code, solely designed to help regulate pre-payment funeral plans, uniquely addresses the importance of freedom of choice of funeral director and associated services for plan holders. There are, to our knowledge, two other codes in existence within our profession which address this subject: the Funeral Standards Council and the National Association of Pre-Paid Funeral Plans.

Having a number of slightly different codes only adds to the public's confusion, particularly if a funeral director is a member of several organisations and is expected to display each individual code in his premises. Listed below are the codes of practice currently in existence and their subscribers:

At-Need Funerals

The National Society of Allied and Independent Funeral Directors - Members are: Independent, family and privately owned firms.

The Funeral Standards Council - Members include: Co-operative Groups, At Need, SCI and some independent firms.

The National Association of Funeral Directors - Members include: some PLC's, some Co-operative firms and some independent firms.

Pre-Paid Funerals

Funeral Planning Council - Members include: Golden Charter, independent firms and the Co-operative movement

National Association of Pre-Paid Funeral Plans - Members include: Several small pre-payment plans including NAFD's own plan and SCI.

Regulation of Pre-Paid Funeral Plans

It is accepted fully by SAIF that paying and planning for one's funeral in advance is, for many people, sensible. A pre-payment plan not only offers peace of mind to people by ensuring that their families need not be troubled about making the correct arrangements at the time of need but it should also guarantee that all costs are covered as arranged and guaranteed within the plan. In 1990 after assessing carefully all the prime branded products, the National Society of Allied and Independent Funeral Directors selected Golden Charter as its adopted Pre-Paid Funeral Plan because it offered a range of comprehensive and flexible plans as well as guaranteeing purchasers complete freedom of choice of funeral director. SAIF are committed to ensuring that any member selling their own plans comply with the code of practice of the Funeral Planning Council. Within the last year there have been several instances reported of unsolicited mail being sent out, and of pressurised and overzealous sales techniques being used. SAIF fully endorses the need for all companies administering pre-paid funeral plans to come under strict regulations. However, we fully appreciate the DTI's difficulty in setting up an effective regulatory system. Although SAIF would welcome statutory regulations, following our discussions with John Thorpe at the DTI this Society takes the view that to bring in some form of legislation would take considerable time and that the current problems would continue to cause the consumer unnecessary anxiety for the foreseeable future. There have been recent suggestions that the solution to the problem of security of funds, refunds and other matters relating to monies placed with plan providers could be addressed through the Financial Services Act. SAIF is against this for a number of reasons:

It has been suggested, wrongly, that the funds held by plan providers are 'clients money'. This is not the case as The Financial Services Act is set up to look after financial services and financial products but a funeral plan is a tangible product, a 'one off' purchase by an individual to provide for the service required at the time of need, not a financial investment.

SAIF believes that funeral directors should not be seen as Financial Advisers.

The practicality of involving the Financial Services Act would be detrimental to the present set-up of the funeral profession in the UK and would offer no real benefit. Due to the unique status of a pre-payment funeral plan and the sensitive and practical knowledge needed to correctly explain and sell the plan, we believe funeral directors are, undoubtedly, the best qualified people to do so. We also fear that to include within the regulatory framework of the FSA those selling a plan would undoubtedly take the responsibility away from the funeral director and only encourage the wrong type of sales people to be introduced. This would not prove to be in the best interest of those thinking of purchasing a plan.

Following consultation with the DTI, SAIF believes that the most practical and effective way to regulate pre-payment plans successfully is to introduce a self-regulating system that encompasses all potential problems including full administration of trust funds under the umbrella of the Funeral Ombudsman. The Funeral OmbudsmanÕs office will shortly be preparing a pre-need code of practice and is liasing with the Funeral Planning Council who has submitted an up-to-date copy of its code for appraisal. The new Funeral Ombudsman pre-need code, which is expected to be adopted by the Funeral Planning Council, will cover all aspects of concern mentioned in the DTI Report of 1996 which expressed views about such matters as trusts, actuarial valuations, advertising, transparency and fees to plan providers. SAIFCharter During 1995 SAIF established SAIFCharter in conjunction with Golden Charter pre-payment funeral plans to:-

Assist the promotion of training and education through the Independent Funeral Directors College Promote other initiatives for the benefit of SAIF and its members

Promote independent funeral directors in a corporate way respecting and recognising the individual needs of locally owned funeral directors As part of this agreement with Golden Charter, SAIFCharter intend to set up a SAIFCharter Trust in the very near future. The Trust will have ownership of 30% of the shareholding in Golden Charter principally to protect the interests of SAIF members and independent funeral directors now and in the future. The present payments being made to SAIFCharter will then be replaced by dividend payments. In anticipation of this arrangement, SAIF have, of necessity, taken an active and increasing interest in funeral planning issues. SAIF has been liasing closely with Golden Charter and with the Funeral Planning Council (FPC), and has representation on the governing body of the FPC. SAIF endorses the views and positions held by Golden Charter and the Funeral Planning Council with regard to security of trust funds, freedom of choice, annual audits and actuarial valuations, compensation schemes, refunds and regulation.

The Issue of Transparency of Ownership

SAIF believes strongly that the rights of consumers, especially the elderly, to be fully informed regarding ownership and details of services provided by funeral directors, are of paramount importance. In recent years many old established family owned funeral businesses have been taken over mainly by public limited companies, the Co-operative movement and, to a lesser extent, other independent funeral directors, thereby possibly affecting the personal level of service and costs involved. These changes and their implications are not generally understood by the public. SAIF strongly supports the Dead Citizens Charter, published by the National Funerals College in 1996, when it recommends ø "That funeral directing outlets display clearly both outside their premises and in advertisements the name of the actual proprietor or parent company where different from the trading name" This matter becomes even more important at a time when the activities of certain sectors of the profession have come under intense scrutiny from the media who have unearthed examples of unethical practice. It is essential that the public be able to identify 'who owns whom'. The lack of transparency within certain pre-paid funeral plans is also of concern. It is generally accepted that many of those taking out such a plan are elderly, some also being financially unaware. Therefore, there is a need for clear information to be given on what is covered in a plan, the conditions attached and the ultimate ownership.

Transparency and the Age Concern Funeral Plan

It is SAIF's opinion that the Age Concern Funeral Plan in particular, seriously fails the transparency test. Furthermore, the plan itself attaches highly restrictive conditions upon the purchaser's ability to arrange their funeral according to their own personal requirements. The independent sector is responsible for 60% of funerals carried out in the UK each year yet this sector, and the Co-operative movement who hold 25%, are unable to carry out a funeral of an Age Concern Funeral Plan holder, if requested, because unacceptable restrictions exist. The following concerns need to be addressed:

a) Many people taking out an Age Concern Funeral Plan do not realise that the statement in their literature "all the arrangements will be handled by a local funeral director" actually means that the nominated funeral director will almost certainly be from a funeral home owned by Service Corporation International UK. Furthermore, the definition of 'local' is open to questionably wide interpretation, e.g., if a purchaser of an Age Concern Funeral Plan is living in Preston, the only funeral director who will currently be able to conduct the funeral is one particular firm owned by SCI based 12 miles away in Blackburn. This position could be exacerbated in rural areas.

b) Many people do not realise that independent family owned funeral directors, nor indeed the Co-operative movement, cannot carry out the funeral of an Age Concern Funeral Plan holder.

c) Further, many people do not realise that the Age Concern Funeral Plan is 75% owned by Service Corporation International from Texas, USA and fully administered at that corporation's subsidiary funeral plan company offices in East Grinstead.

d) When taking out an Age Concern Plan almost every family will be asked to pay extra at the time of death. Although funeral directors' charges are guaranteed, disbursement fees are set at an unrealistically low amount. These fees have risen well above inflation in recent times, meaning that most plans could entail a substantial shortfall.

Complete Freedom of Choice

SAIF believes it is essential for families always to be able to select the funeral director of their choice especially as, today, the range and value of services offered can vary considerably. In many cases the family may know the funeral director directly or indirectly or they may be chosen because they are the nearest, the most reasonably priced or have been recommended by a friend. The family's right to choose should, on no account, be restricted. On average, a person is only involved in directly organising a funeral twice in their lifetime. Because of this and the public's tendency to ignore the subject of death until it is absolutely necessary, people have little or no knowledge of procedures or what to do when a death occurs. Therefore, whatever the age or background of the person arranging the funeral, they are potentially vulnerable to being influenced at a time when they are under great stress and sadness.

SAIF believes strongly that those involved in all aspects of giving advice to the recently bereaved, whether they be Hospital Authorities, Registrars, Coroners Offices or indeed Funeral Directors, have a duty to each family to offer them accurate, relevant and impartial information at all times.

Two concerns that SAIF currently have where the choice of preferred funeral director may be compromised are:

a) Hospital Bereavement Contracts

It is accepted that on occasion and for various reasons Hospital trusts may have to issue tender documents to enable them to engage a contractor to carry out the removals of the deceased from a ward to a funeral director's Chapel of Rest. Currently the Central Middlesex Hospital in London are operating a system where all of their bereavement services are under the control of their contractor including the employment of a bereavement officer who meets each family. Although guidelines exist, it is quite clear that a position has been created where vulnerable bereaved families could be influenced to use a particular funeral director. Hospitals should ensure that clear and impartial advice is given at all times and that the bereaved be encouraged to take their time to decide.

b) Coroners/Police Removals

Again, it is recognised that Funeral Directors are engaged to carry out coroners' removals of the deceased. However, for generations this has successfully worked when in most localities the Coroner's Officer would ask the family which funeral director they require and if no preference, engage the nearest one. Today, many Coroners' contracts exist where only the contractor can remove the deceased thus, again, creating a situation where the contractor may be able to influence a family.

It is SAIF's view that Hospital Trusts and Coroners' Authorities, when issuing such contracts have a responsibility through their tender document to deny the contractor the opportunity to influence a bereaved family in their choice of funeral director. Conclusion

SAIF is very conscious of the fact that those involved in all aspects of bereavement services have a duty and responsibility to respect fully the vulnerability and emotional position families find themselves in.

As a member of a caring profession, the funeral director's role and those of their staff is unique and one of trust. Helping a bereaved family through the most devastating stage in their life in a professional, understanding and sympathetic manner is, without doubt, the primary aim of all concerned within the profession or certainly should be.

However, to maintain and successfully achieve these aims in today's commercial world, SAIF strongly believes that fundamental points such as complete freedom of choice to the bereaved and transparency of service and operations, strictly regulated by a code of practice, are essential in maintaining the high standard expected of our profession.

SAIF strongly believes that the high standards and reputation which have been associated with the funeral profession for generations are in danger of being affected by certain commercial activities that are denying bereaved families their right to obtain complete freedom of choice in all aspects of bereavement. Whilst acknowledging the divisions that currently exist within the funeral profession,

SAIF calls upon the entire funeral profession to realise their responsibilities and work towards one single code of practice that can be effectively and meaningfully administered. Recommendations In accordance with the above comments SAIF wishes to recommend the following:

After consultation with the DTI, SAIF believe that the most practical and effective way forward to successfully regulate pre-payment plans is to introduce a self-regulating system which encompasses all potential problems including full administration of trust funds.

We recommend that all Hospital Trusts and those authorities establishing Coroners/Police contracts realise they have a duty to recognise bereaved families' vulnerability and, therefore, deny contractors through the wording of the tender documents any opportunity to be able to influence the bereaved's choice of funeral director.

We recommend that all pre-payment companies through their literature make clear their ultimate ownership and restrictions in their schemes such as choice of funeral director and disbursement fees. Also the advertising and marketing of these plans need to be regulated by a single code.

We recommend and support the Dead Citizens Charter view "that all funeral directing outlets display clearly both outside their premises and in advertisements the name of the actual proprietor or parent company where different from the trading name", in such a manner that they are truly visible.

We recommend that Charities should not engage in restrictive practices and should make available full and fair information about all funeral directors and all funeral pre-payment plans. Any monetary gain for the Charity from a pre-payment plan company should be clearly declared.

We are confident that if the above recommendations are introduced the general public would certainly be better protected and more fully informed. We also believe that the traditionally high standards of funeral directing would be preserved and that the dubious and unethical practices that have been allowed to come into the profession would cease.