4. PRPG: New Clients and Engagements Flashcards
Does a member have to act when a client approaches them?
The member has no obligation to act for the prospective client. If they feel that they will not be able to fulfil a duty of care they don’t have to act.
What do you have to disclose to the client when there is commission? (3)
Nature, amount and identity of third party
What will the member have to assess about the client to decide whether they are fit to work with? (5)
Personal circumstances, Financial standing, Business situation, Source of funds, Conflict of interest.
What should you remember to include if you are signing the contract outside of the member’s business premises? (1)
A cancellation notice
Explain professional clearance (3)
- Must have permission from the prospective client to speak to previous adviser. Must be in writing. Must ask if there is any professional reason as to why they shouldn’t take on the client.
- Good time to also ask for relevant handover documents from the previous adviser. Requests should be relevant and reasonable.
- If client declines you to speak or adviser doesn’t respond, you should weigh up the facts and circumstances and decide whether to take on the client
Is an engagement letter compulsory?
No, it is strongly recommended
Is a member allowed to look back at the previous advisers work? (Hint: Duty to)
No duty to investigate unless client requires otherwise. However if they do come across an error in the previous advisers workings, they must inform the client.
The engagement letter pack comprises of the following: (5)
- Covering letter
- Schedule of services
- Terms and Conditions of business
- Privacy notice
- Cancellation notice
Engagement letters should be reviewed:
Annualy (Strongly recommended)
Separate engagement letters should be issued between: (7)
- Individual and spouse
- Individual and civil partner
- Individual and business representitives
- Partnership and partners
- Company and shareholders
- Company and directors
- Trustees and beneficiaries
What happens with the engagement letter if a sole practitioner turns to a partnership? Or if a partnership turns to a company?
New engagement letter should be issued
How should an engagement letter be made if you’re working for a group of companies. (E.g. Topman, Topshop, Burton)
One engagement letter to the parent company
E.g. Arcadia group
In professional clearance, when requesting information, what should requests be? (2)
Reasonable & Relevant
