The Futures Company

Claudia Rimington writes:

I’ve been doing some work on funeral planning products, and a number of providers, notably Age Concern, are advertising the guaranteed nature of their funeral plans – payment plans where you pay for a funeral in advance.

It is guaranteed because you can guarantee that it buys a ‘set’ funeral in the future – unlike a savings plan, which might not keep up with rising funeral costs, leaving relatives or friends to cover the difference.

So why is this interesting?  The focus on ‘guarantee’, combined with the remarkable recent success of funeral plans, points to a prevalent consumer trend.  The Telegraph suggested recently that the guarantee was the reason for the success of these products.  Our own research in Planning for Consumer Change suggests the same.  With consumers living in a world of greater uncertainty, we know that they look for where they can exert grater control.  Guarantees provide this – indeed as they did in the 19th century when funeral plans were common (to insure against being buried in a common grave).

I also like the straightforward way Age Concern sells its offer. The funeral plan is simple and transparent – you pay for a certain number of things at a set price and they guarantee you get this. Other companies offering guarantees don’t always do this.   Prudential, with its Guaranteed PruFund investment fund, explains that its guarantee results from their special ‘smoothing formula’, which is almost impossible to understand from reading their website, and which undermines the desire for control which makes the offer attractive in the first place. And of course, the whole point of a ‘guarantee’ is that you know what you’re going to get.