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Fee for No Service

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What is Fee For No Service?

A fee for no service is failing to provide ongoing advice to customers who were still charged for the service. The financial institution may not have offered the annual advice review promised to their clients, which can happen for several reasons.

For instance, the adviser may have resigned or retired, and the organization didn’t appoint a new adviser to extend their services. Additionally, the adviser may have been negligent and failed to offer the necessary annual review.

If you’ve been subject to this treatment, you may qualify for compensation. However, the organization can still prove they provided the services you were charged for by producing the relevant paperwork. The AFS mandates their licensees to submit their Record of Advice or Statement of Advice to corroborate the provision.

If the company resorts to secondary evidence in determining whether annual reviews have been completed, it needs to be reliable. More specifically, the AFS expects independent quality assurance to verify the customers have received their services. This can be done with the help of third-party assurance providers.

But if the licensee can’t collect solid evidence that the review was performed, it needs to refund the fees to the customer.

Industries affected by the Fee for No Service review:

  • Superannuation Funds
  • Financial Advisors

How It Works

We’ve already covered how an absent or negligent adviser can lead to fees for no service. But there are other situations to consider.

For example, banking institutions often charge their clients a single ongoing-service-arrangement fee that requires them to perform several other services besides annual reviews. These ancillary services may include seminar invitations and periodic newsletters. If the customer doesn’t receive either and is still charged, they’re subject to fees for no service.

Another reason why customers may have to cover fees for non-existent provision is if the organization servicing them relies on automatic periodic payments. This generally includes adviser fees and sales commissions. Under such arrangements, some licensees prioritize fee generation and advice revenue over ensuring they’re actually delivering the necessary services. As a consequence, the customers may not receive what they asked for but are charged a fee nonetheless.

Can I Get Money Back?

Fees for no service have lost people a lot of money. Here are a few of the most notable examples:

  • Irresponsible service outsourcing – a financial institution hires a third-party provider to handle some of its branded products. However, the company had no access to the institution’s application system, preventing it from processing changes to ongoing fees. Thus, requests to abolish adviser fees weren’t met, impacting a large number of customers.


  • Higher administrative costs – a coding change made to a bank’s fee scheme was used for wrong products. When the linked advisers and associated fees were removed, the administrative fee was increased by the sum equal to the adviser fee.


  • Providing services to too many clients – a company extends an annual advice review or other offerings to more customers than it can handle. In turn, the organization doesn’t have the human resources or capacity to fulfil all requests, leaving many people charged for no services.