Ongoing Advice Charge (OAC) Claims: Are you paying for services you’re not receiving?

Planning for retirement can be tricky, so many people use financial advisors to help manage their pensions. These advisors offer help and ongoing management so your pension grows over time.

Firms like St James’s Place offer this service to retirees, but there have been some concerns about whether they’re actually providing a service for their Ongoing Advice Charge (OAC).

In this handy blog post, we’re going to take a closer look at OACs and what you can do if you think you’ve been unfairly charged.

This guide covers:

• What is the Ongoing Advice Charge (OAC)?
• The Issue: Charging without service
• What are people not receiving?
• What are your rights for making a claim?
• When can you make a claim?
• What To Know Before Selling Your Pension?

What is the Ongoing Advice Charge (OAC)?

The OAC is a fee paid to financial advisors for managing your pension fund. The charge covers services that make managing your pension easier, including:

Reviewing and rebalancing your portfolio

Assessing your investments so they align with your risk profile and money goals.

Ongoing financial advice

Guidance on investment strategies and updates on changes in the financial markets or regulations.

Daily admin

This covers the day-to-day management of your account, such as:

• Processing contributions
• Managing withdrawals
• Ensuring compliance with regulations

OACs are charged as a percentage of your total pension pot (0.5% to 1.5% per year), and while this may seem small, it can make a real dent in your pension’s growth over time.

For example, if your pension pot is worth £100,000 and your OAC is 1%, you would pay £1,000 a year in OAC fees.

The Issue: Charging without service

It’s come to light that some advisors, including high-profile firms like St James’s Place, have been charging OACs without actually following through with the service.

This “fee for no service” is a breach of trust and a violation of UK financial regulations.

And it doesn’t seem to be an isolated incident; it’s likely happening across the industry. Small independent advisors and larger, well-known firms have been caught in the crossfire.

The financial impact

Although only a small percentage of your pension, these unserviced charges are costing clients hundreds or even thousands every year.

For example, a 1% fee on a £200,000 pension pot over 20 years could cost a client over £90,000 in lost growth, assuming a 5% annual return.

So what are people not receiving?

Some retirees are being charged for a range of services that they’re not receiving, including:

Investment reviews

Quarterly or annual portfolio reviews.

Financial advice

Updates on market conditions, regulatory changes, and tailored recommendations.

Admin services

While basic account maintenance might be done, other services like tax planning or pension contribution strategies are being ignored.

Regular communication

Many clients report going years without any meaningful contact from advisors, despite paying for these ongoing services.

What are your rights for making an OAC claim?

If you think you’ve been paying your Ongoing Advice Charge without receiving the service from your financial advisor, you should understand your rights and what to do.

Transparency

You have the right to clear information about the fees you’re being charged and the services they cover. This includes:

• A breakdown of all charges, including OACs, platform fees, and other costs.
• Clear explanation of what services are included.
• Information on how fees are calculated and taken from your account.
• Regular statements showing all fees charged.

You also have the right to ask questions and get clear answers about any part of the fees/services you don’t understand.

Value for money

Your financial advisor should provide suitable services that offer fair value. This means:

• The services should be appropriate for your financial situation, goals, and risk tolerance.
• The fees charged should be in line with the services provided and the benefits you get.

Your advisor should be able to justify their fees and show you how they add value to your investments.

When can you make a claim?

You can make an Ongoing Advice Charge claim if any of the following situations apply to your case:

• You’ve had no ongoing financial advice or updates on market conditions
• You’ve had little or no contact with your advisor over an extended period
• Quality or frequency of contact isn’t up to par
• The investment strategy doesn’t align with your risk profile

There are many more reasons to make an OAC claim, so if any of the following doesn’t fully match your situation, but you still suspect you might have a legitimate claim on your hands, get in touch with Spencer Churchill Claims Advice today.

Let us fight for your case for you

If you’ve worked with a financial advisor for your retirement fund, you’ll probably know that the finance industry is known for its jargon.

This is where Spencer Churchill Claims Advice comes in. Our team of experts specialises in chasing claims against financial advisors like St James’s Place who haven’t delivered on their promises to you.

What can we do for you?

Here’s how our team of financial claims experts will help you with your OAC claim and get your money back in your account.

• Comb through your pension statements and communications with your financial advisor, including emails, letters, and phone conversations.
• Review your original pension agreement and any following changes to understand the services you were promised.
• Compare the fees you’ve paid against the services you’ve received, and look for patterns of overcharging.

Based on our review, we’ll provide an honest assessment of whether you have grounds for a claim. If we think you do, you’ll get our step-by-step help on your claim.

Get back the money you deserve with Spencer Churchill Claims Advice

If you think you’ve been unfairly charged and Ongoing Advice Charge, don’t waste time paying for services you’re not receiving.

Contact a friendly member of our claims team today for a no-obligation assessment of your situation. We’ll help you get back what’s rightfully yours and secure your financial future.