St James's Place - Unused Ongoing Advice Charges (OAC)?

alcester

Hi All,

My TL;DR question is: -

What constitutes Ongoing Advice to allow SJP to charge their OAC fee?

The context to this question is below: -

I have a Retirement Account with SJP through my then-employer's workplace pension scheme (opened in 2020).

I have had no contact or advice from SJP since then, aside from an annual email urging me to meet to discuss 'really urgent' topics which are thinly disguised sales attempts.

In Jan 24 I received a letter saying I would receive a refund for unused OAC, and today (nearly 14 months later) I received a cheque for a substantial amount.

So far, so good, but I received no statement or calculation to substantiate the refund, just that it applied to 'the most recent period' of charges.

On investigation online, it seems SJP applies a range of percentages to the account value to arrive at the OAC charge. I cannot find any statement of charges in any of the literature available to me on the SJP client portal to confirm what my charge should be.

If I take the lowest percentage I can find from my investigation (0.5%), the refund I received equates to only a single year's worth of charges...

So, before I dive into a battle to recover further unused charges, can anyone let me know if an OAC is rightfully chargeable by SJP if the client ignores the annual emailed offer of a meeting to discuss 'really urgent' topics?!

dunstonh

I have a Retirement Account with SJP through my then-employer's workplace pension scheme (opened in 2020).

First thing that is key is that it was opened in 2020.   Plans commenced on earlier dates can fall under different regimes on what is or is not required.

So far, so good, but I received no statement or calculation to substantiate the refund, just that it applied to 'the most recent period' of charges.

you will need to ask them as the term "recent" could be open to intrepretation.

On investigation online, it seems SJP applies a range of percentages to the account value to arrive at the OAC charge. I cannot find any statement of charges in any of the literature available to me on the SJP client portal to confirm what my charge should be.

The OAC standard was 0.50% but could be lowered, especially on auto-enrolment compliant schemes where charges are capped to 0.75% and don't have scope to pay 0.50% OAC.

So, before I dive into a battle to recover further unused charges, can anyone let me know if an OAC is rightfully chargeable by SJP if the client ignores the annual emailed offer of a meeting to discuss 'really urgent' topics?!

If the adviser firm has made contact with you to arrange a meeting and you have chosen not to have one (either by telling them no or ignoring the request) then they are not required to refund that year.

If the client continues to refuse to respond over multiple years then the adviser firm should consider turning off the OAC element of the charge.   The FCA doesn't define what multiple is.  It says good practice is to have... "Policies in place to prevent the collection of fees where clients had not engaged with the service for a period of time".

The guidance is:
Where firms have made every effort to deliver a review but customers have declined or failed to engage with information requests, then the FCA considers it ‘less likely’ that redress will need to be paid. However, where this has occurred over multiple occasions, the FCA expect firms to discuss with the customer whether they still require the service.  

A customer not engaging is unlikely to discuss it as that would need getting in contact.  So, its likely to be a more direct approach of writing out saying they have attempted to contact but as there has been no responses, the service and charge will end.

So, one or two years of non-engagement is acceptable not to refund, but if it gets to three, then the expectation is to end it.  But, there is a bit of interpretation in there.   I have seen multiple compliance bulletins recommending different strategies.    One said after two years of non-engagement, end the service charge.    Another said after three years of non-engagement, end the service charge and refund that that third year.    A firm may decide to end it earlier and turn off the OAC.  Firms can go better than this 

For reference, the most common period to determine annual is not within the calendar year but within the tax year.  But whatever the firm uses as their "annual period" it needs to be consistent.