The Partnership Podcast

Online transparency with James Daley

March 27, 2020 Golden Charter Season 1 Episode 6
The Partnership Podcast
Online transparency with James Daley
The Partnership Podcast
Online transparency with James Daley
Mar 27, 2020 Season 1 Episode 6
Golden Charter

Fairer Finance consumer champion James Daley explains the importance of transparent pricing, and the service and information families should expect to receive from an independent funeral director.

Show Notes Transcript

Fairer Finance consumer champion James Daley explains the importance of transparent pricing, and the service and information families should expect to receive from an independent funeral director.

Malcolm Flanders [00:00:05] In the summer of 2017, a report from Fairer Finance made a splash across the world of funeral planning. The consumer champion was prescient in asking whether pre-paid plans were working well for customers, and its work undoubtedly factored into the many changes that plan providers and policymakers have been making ever since. The man behind that report was James Daley, a well-known consumer journalist who devotes much of his time to ensuring families are protected, whether they have planned ahead or at their time of need. Having acted early on to bring the sector to a roundtable with the prospective regulators in the room, James is now a member of the Funeral Service Consumer Standards Review, which aims to improve the quality, standards, and outcomes funeral service customers can expect. 

Malcolm Flanders [00:00:51] We wanted to hear from an independent voice who has customers' interests at heart. So I sat down with James to explore changes in the profession, their impact on families, and how we can all help develop a more transparent, clearer and fairer future for customers. 

Malcolm Flanders [00:01:15] So James, delighted you could join us today for this podcast, appreciate it. 

James Daley [00:01:18] Thanks for having me. 

Malcolm Flanders [00:01:19] Can I start with a sort of theme around customers, if I may? Your work keeps customers at its heart, I know. And I know you've written about your own family's experience of funerals. How would you say the average customer views the funeral sector today? 

James Daley [00:01:36] I think the average customer doesn't think about funerals until the moment they have to think about funerals. And that's human nature. I was a bit unusual in that when my mother died, I told the family that I wanted to arrange that funeral, because I wanted to understand what the process of buying a funeral was like. As somebody who spends my life looking at whether or not consumers are getting a fair deal, and are making informed decisions, and being given the chance to make informed decisions, I could see that there would be the potential for bad outcomes in a market where there was considerable complexity, consumers, you know, by the nature of the circumstances, vulnerable, and actually the costs are quite high as well.

James Daley [00:02:23] And my experience wasn't great, to be honest, and led to me sort of starting to write some articles about the sector. What I quickly noticed was that I could get everything I needed at quite a low price, but the moment I wanted to start customising it by deciding on the time of the funeral, or changing the quality of the coffin, the price would double. And so what that said to me is that most people were buying these tailored packages, and so the margins in the sector must be considerable, because if they could do it for me at half the price, that must be somewhere closer to what the actual cost was.

James Daley [00:03:03] And so, I started to be concerned about whether or not the market was working well for customers. But then it was coincidence that Dignity came to us, perhaps having read those articles, and said, "Look, we're a big player in the pre-paid funeral plan market. We don't think this is working well at the moment because there are lots of new companies coming in. They're not regulated. None of us are regulated. And some of them don't have the scruples and the discipline that we have. And we're worried there's going to be a scandal."

James Daley [00:03:34] And so that's what led us to write that report that we wrote in 2017. And, you know, it's important to say that although Dignity paid for that report, we had complete editorial control over it. And, you know, that included the right to criticise them, which we did. One of the elements in the industry that we shone a light on was high cancellation fees. And Dignity at that time was one of the worst offenders. And we certainly moved the dial in the market by shining a light on that.

James Daley [00:04:02] So we found problems and we wrote the report, which you mentioned. And everything has snowballed from there. And, you know, funny to think three years later, you know, there is so much going on in this sector, so much change coming down the pipes. 

Malcolm Flanders [00:04:17] Well, I remember that report, and it doesn't seem three years ago, I must admit. Just coming back to customer for a moment, I'm interested as to what would most reassure you as a customer. So given what you've said, what single fact would make you more likely to trust someone with a future funeral for your families? Is there one thing you can identify? 

James Daley [00:04:38] Well, for me, it is transparency and it's absolute transparency. So being really clear with the customer about what the prices are for different things, and those prices broadly linking to what I'm getting. And, you know, there were so many moving parts to a funeral, that if you bundle it all up, it's very hard for a customer to understand whether or not they're getting good value. And unfortunately, it's very difficult to shop around at the moment without calling up every firm individually. Most funeral directors are still not putting their prices online. They want to be able to have that conversation with you. 

James Daley [00:05:17] And so that's what would make a difference for me, if I could walk in, I could understand what all the different options were, how the prices varied and not be pressurised into spending more, because, you know, I'm made to feel that I might be selling my loved ones short if I bought a cheaper funeral. But by being given a clear indication of what my money was going to buy and how I could spend more if I wanted to, but didn't have to. 

Malcolm Flanders [00:05:41] I get that. I often say this to funeral directors – price is important, but as is value and service, and then that clarity. So how easy do you think it is today for funeral directors to explain the relativity between price, value and service in terms of offering a funeral to customers? 

James Daley [00:06:01] It is incredibly challenging for funeral directors to demonstrate the value because, to some degree, the proof is in the pudding, and when you're buying that service, you don't know whether it's going to be great. And at the end of it, you can't ask for your money back. So there is that sort of leap of faith. 

James Daley [00:06:21] Obviously, a lot of funeral directors end up getting business because somebody has referred that customer. Perhaps they've already been to another funeral organised by that funeral director. So, you do start to get a reputation for good service, and that's clearly a really important element of the market. But for the customer, it is hard to get that perception of good value and that's why I think transparency is so important. So you can break it down. The idea that for me to go from having an MDF coffin to anything else, I had to pay double the price. You know, it feels like entrapment. And the moment I start saying I want the cheapest funeral, you know, the person stops himselffrom saying, well, that's really for people on benefits. 

James Daley [00:07:09] And, you know, suddenly me and my siblings are on the back foot thinking, well, we don't want to give this person anymore than we have to now because they're trying to kind of trick is into spending more. And then, of course, you know, we went round the corner to the florist and spent £600 on flowers. It wasn't about the money, actually. It was about the fact that we felt like they were trying to pull the wool over our eyes. 

Malcolm Flanders [00:07:30] Okay, thank you. And actually, in the answer, you alluded to the kind of increase of almost professionalism in certain aspects of the customer engagement. So, I know the FPA looks it highly likely, we know, that we need to formalise agreements with our funeral directors that sell our plans, and the FPA specifically has asked now that providers do have individual contracts with each funeral director across the UK. Do you see that as a benefit for the customer?

James Daley [00:07:57] Yeah, I think absolutely the customer needs to have some kind of certainty. I mean, in the sort of bad old days of a few years ago, there were companies just taking the money in the door and saying, "don't worry, we'll work out what we're going to do with you when you've passed away." You know, actually, the duty of care is a bit different when you're selling a pre-paid plan because, of course, you are selling to the person who is going to be the subject of the funeral. And that is quite different to selling to the relative who is going to experience the funeral. So you're selling to somebody who is never going to be around to see whether or not you have delivered on your promises and whether or not their expectations have been met. 

James Daley [00:08:39] And so, you know, I think you need to take great care to show them, with some level of certainty, what they're going to get. And that's what, you know, contracts with funeral directors provides. Circumstances change and there has to be some flexibility there. But as a starting point, they should know that, you know, if they die tomorrow, this is who's going to dispatch my funeral, and this is what it's going to look like. 

Malcolm Flanders [00:09:04] I understand. Thank you. And staying with the FPA theme for the moment, we know it's increased its level of requirements. A new code of practice is now in force. Do you feel the FPA is now better placed to influence those behaviours out in the market?

James Daley [00:09:17] Yeah, the FPA has undeniably stepped up its act over the last few years. And, you know, in fairness to Graeme that work had started before our involvement in the sector. I mean, you know, I think in all honesty, it used to be a bit of kind of an old boys’ club, more of a trade body than, you know, a regulator. The board was made up of all of the executives of the companies that it was meant to be looking out for. That has changed. They've toughened up their act. They brought in more independent people and they've tried to work hard to make sure that those companies that have been outside of their regulation are on the road to coming under their umbrella.

James Daley [00:09:58] So, you know, I think they're doing a lot. And that's great because, you know, a bit like I was talking about in the at-need market and the FSCSR, if that's how the acronym goes. You know, there's no point sitting on our hands and waiting until legislation has been enacted. If we know there are problems, let's deal with them now. 

Malcolm Flanders [00:10:19] Thank you. Now, the other sort of dimension of the regulation is the Competition & Markets Authority. And we know they’re about – you've mentioned it already in terms of considering online pricing, so I think that's definitely going to happen. Both trade bodies have called for this, we know. And you've written recently in the SAIFInsight magazine. 

Malcolm Flanders [00:10:42] Again, just if you could summarise, why is it so important? Is it just about price transparency? Or is there something about customers being very clear on what they're getting for their money? 

James Daley [00:10:54] Well, there's two elements to it. First, customers need to be able to understand exactly what they're paying for. And there are an awful lot of moving parts to a funeral. And, you know, they need to be able to understand if they want to take an element away, or add an element, how that's going to affect the cost. But more importantly, you know, the industry needs to be transparent in this regard so that we can have some proper comparison. 

James Daley [00:11:23] There are comparison sites that have been trying to come into this market and have an impact over the last few years, and they're struggling to do that. And that is partly because many in the industry don't want to co-operate with them. And so what we've got at the moment is sites where the prices are generally wrong. And I'm not sure what their commercial models are, but if they're relying on funeral directors to pay them, then I don't imagine they're making very much money because most funeral directors don't want to engage in that.

James Daley [00:11:53] So we kind of need to get to a world where we have broken down pricing, that comparison sites can aggregate, and then customers can easily get an idea as to where prices sit in their local market. 

James Daley [00:12:08] I understand the industry is nervous about that. And, you know, the argument against it is, well, then suddenly it becomes a race to the bottom in price. And I have some sympathy with that. We need to also think about how we measure quality in the sector as well. And hopefully the CMA is going to address these issues. We know that they're looking at minimum standards. And so, you know, then in terms of the kind of race to the top on quality, it does come down to your reputation in the local area, customer reviews, demonstrating that you've got state of the art facilities, or that you can offer greater levels of flexibility.

James Daley [00:12:50] There are lots of other frontiers to compete on, other than price. But I think it's ludicrous to say we can't give customers an honest price or the whole thing will become about price. They need to know the price, and what kind of world do we live in at the moment, where half the customers are getting a good deal, half the customers are getting a terrible deal, and no one really knows?

Malcolm Flanders [00:13:10] Thank you. That's all we have time for on this week's Partnership Podcast. However, families’ experience impacts everything we do, and James had much more to say about the market. So you will hear from him again in our next episode. We'll talk more broadly about what the future of funerals looks like and the opportunities that are emerging. I'll talk to you then on the Partnership Podcast.