Risk & Business Magazine F.A. Peabody Insurance Magazine Fall 2017 | Page 29
FAPCO Administrative Services
A Story Of Trusts
into new territory. With its beginnings in
Houlton, the enterprise next concentrated
on attaining new business in Aroostook
County where the brand was better known.
A key feature—and important to funeral
directors—was that the trust accounts
were to be invested safely in local banks
and administered by a local business at
competitive rates of return. This approach
was successful in Aroostook, based on the
knowledge and trust that area funeral homes
had in F. A. Peabody Company. One by
one, more funeral homes came on board in
Aroostook, and soon, FAPCO “Admin” was
serving funeral homes statewide.
Connie Hagan, Dee Henderson and Billie Jo Hagan
I
n 1991, the F. A. Peabody Company
(FAPCO) was approached by a local
funeral director searching for a local
mortuary trust administrator to invest
a client’s funds in local banks rather
than stocks. As people approach their golden
years, many folks choose to prepay their
funeral expenses to relieve their loved ones
of this burden. Funeral directors must put
those funds into trusts, ensuring the money
is there when their client’s final day arrives. In
the early 1990s, local banks were not involved
in the administration of trust accounts for
prepaid funerals. Furthermore, in 1988 the
IRS had changed the rules and reporting
requirements for mortuary trust accounts,
and most funeral homes were not set up for
the administration of the trust accounts
under the new IRS changes. Though some
entities served as third-party administrators
of these trust accounts, the funds were not
being invested locally. Changes in the law and
the desire for the funds to be invested in local
banks gave birth to FAPCO Administrative
Services. Richard Hammond of F. A.
Peabody’s Financial Services division led the
effort.
Two funeral homes agreed to be the initial
test cases for the new venture. Their clients’
trust accounts would be invested in a bulk
CD, with a local bank serving as custodian
and with F. A Peabody performing the
IRS reporting and other functions as the
administrator under a new F. A. Peabody
division. There were many challenges
initially, starting with developing a
proprietary software program to handle the
accounting and reporting required by the IRS.
Recognizing the need for greater oversight, in
1993 Connie Hagan, who was then serving
as comptroller for another entity, was asked
to come aboard to lead this new venture by
unraveling the reporting and compliance
issues and to build the client base.
In the next two years, Connie split her time
between two ventures for FAPCO until
the Administrative Services operations
were running smoothly. By 1995, FAPCO
Administrative Services began expanding
In addition to creating a local solution
for funeral homes’ mortuary trust needs,
Connie also recognized a gap in the state’s
continuing education (CE) offerings. She
worked tirelessly to obtain approval in
Maine to provide CE courses for funeral
directors. As a value-added service, FAPCO
Admin began hosting day long programs
in northern and southern Maine to funeral
home clients, accredited and approved by the
Academy of Professional Funeral Services,
which helped boost recognition of these
programs statewide. Today, more than
eighty participants attend our CE programs
annually.
FAPCO Administrative Services is also in
New Hampshire for administrative trust
services and has diversified by using its
proprietary sub-accounting program to offer
third-party administration for municipalities
and nonprofits.
In the twenty-six years since its inception,
FAPCO Administrative Services has
witnessed several industry changes. The
three largest are that consumers are price-
shopping funerals more than ever before
with cremation becoming more popular,
smaller funeral homes are being purchased
by the larger funeral homes, and paperwork
has increased dramatically due to state and
federal requirements. Future growth for
the enterprise will come with new types
of administrative offerings and ventures
into new territories. As laws change, new
challenges and opportunities will present
themselves. +
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