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. + 29