For an industry that has been dependent on interest income, the past 9 years have been tough on the death care industry.  Interest rates started to decline 9 years ago, with the bottom hitting in 2008.   Zero interest rates forced death care fiduciaries to diversify into equity investments, but trusts have experienced a sideways market for more than a year.  Some market watchers predicted that the market’s performance through May of this year signaled a rally that could prove a return to better days.  (Sideways Market – Breakout?) But, May has proven the year’s high point, and the markets have seen a significant slump since then.

There had been a glimmer of hope that the Federal Reserve would use its September meeting to announce the first rate hike since 2006, and the start of the return to normalcy for investment markets.  But, the Federal Reserve blinked, and the investment markets reacted negatively again.   This probably means a continuation of the sideways market through 2015, and possibly well into 2016.

One reaction from some funeral directors is that the 1% return of an insurance product is better than the uncertainty of a trust.  The various price protection programs offered by insurance companies that specialize in preneed policies suggest that many funeral directors disagree.

The investment markets are forcing the sources of preneed funding to become more creative, and complex.