I'm starting my practice now and I'm currently finalising the template for my letter of engagement, but I'm not sure if any mention of MLR should be included.
I'm waiting for the ICB to send me the MLR pack since they supervise me for MLR, but I need to have my letter finalised now as I have clients ready to sign up to my services and I do not want to miss these opportunities because of this delay.
I have seen letters of engagement from accountants and they have quite a lengthy paragraph about MLR and the identification they need from clients (e.g. copy of passport and proof of trading address). I have also looked at the letter templates suggested by the ICB on their website and MLR is not even mentioned. Hence why I'm unsure what the correct procedure is when engaging a new client as a bookkeeper.
Should I mention MLR and ask a new client for proof of identification and address (to keep on file)?
Any suggestion form more experienced bookkeepers/accountant would be much appreciated.
Thanks.
Fabs
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I add a paragraph in the T&C section, stating that I am required by law to have proof of identity, and that it is required before I commence work.
I do not generally list what is acceptable, I discuss it at the initial meeting, so that the client can get the necessary copies together by the next meeting.
I make no mention at all of MLR on my letter of engagement, however I do cover it within my new client information pack which every client gets a copy of.
I'm one of those with a quite lengthy paragraph in the engagement letter relating to MLR.
I feel that mentioning these things up front puts off anyone who thinks that as a bookkeeper we're easier to get past than accountants.
I am also quite specific in my T&C that my company will not take on clients who have been declared bankrupt or convicted of non motoring related offences.
As noted by Bill, the list of acceptable forms of ID can be quite lengthy so I don't actually bother with that in the letter but it is made clear to the client at the meeting what they need to provide before I can start working with them.
Kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I mention it in my Letter of Engagement and state about the id and I have to comply etc, to be honest I don't think clients mine it being there at all, lets face it if they go to the bank to open up a new account they have to take ID with them.
Quite interesting that you mention that you don't take on clients who have been convicted for a non motoring offence. How do you check this, or is it just down to the client to disclose, and whats the reason?
think that it's a hang back from wearing my banking head in that only squeaky clean candidates need apply.
I keep hearing these companies telling people that bankruptcy is the easy way out and then they can just start again with a clean slate!!!! Not if they ever want to work in high finance it isn't.
Banks tend to regard people who take this route with utter contempt as its the equivalent of taking out a loan then renaging on your commitment to repay it.
I'm a little more flexible in at least I appreciate that there are some genuine cases amongst those who use bankruptcy like a lifestyle choice but to be honest the feeling that I get us that they are in the minority with people now using this option as a first choice rather than last resort.
I must admit I really depend on the client to disclose on the assumption that I will check their history. However, if I needed to a CRB check is only £26 (or £36 for the enhanced version (going up to £44 soon appartently)) and if you think about it, taking on a client is not so dissimilar to taking on an employee.
Here's a link to a useful start page for CRB checks ((although considering your knowledge gained from your other role I suspect that you know where to find this anyway!).
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
CRB checks don't work here Shuan. We've now moved to PVG (protecting vulnerable groups) which seems to have a strict criteria. Having said that, I'll take anyones money. I don't particularly care if they got in a drunken fight 10 years ago (or last week) and got done for an assault, or had an argument with their partner and have a breach on their record.
And with bankruptcy, I dont understand enough to say whether it has an impact or not.
So if under Scottish law you are not allowed to do proper due dilligence on clients surely it would make more sense to incorporate South of the border so that Scottish law was not applicable?
If I had someone come to me who lived in Scotland I would have no problem having them checked out via CRB and Experian but it sounds from what you are saying that if my company was based North of the border then that would not be allowed?
As for protecting vulnerable groups, I'm all for protecting those who supply the money rather than giving disproportionate protection to those who want to borrow it.
If the scenario exists that banks cannot do proper checks on people applying for loans then surely they just won't loan them the money unless they apply for the loan from an English bank (situated South of the boirder) which would be able to do the checks.
There has to be a load of exclusions in this PVG legislation or, if it is as you say I can see a lot of English banks (and maybe more than a few Scottish one's) setting up shop right at the end of the M6 before it changes it's name to the M74.
Actually, this whole conversation can't be right. I've worked with Scottish banks and Insurers and they do check out potential clients and employee's properly.... Actually, come to think of it, the Scottish institutions seemed to only be taking on English, Irish and Antipedian contract workers who were all thougherly vetted (criminal record checks and financial checks) before being allowed to work on the companies financial systems.
Could this be a case of local legislation backfiring???
P.S. sorry, took too long to write this as have to be so careful to ensure that nothing comes accross in a way unintended when we're talking cross border issue's.
Like the new Homer avatar.
-- Edited by Shamus on Friday 30th of September 2011 08:35:04 PM
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Having read your replies to Kris, I still don't get your requirements. We are talking about you as an bookkeeper/accountant doing somebody's books, and not whether you're going to lend this person money or you having them do your books. What does whether somebody have ever committed a criminal offence or declared bankrupt (repaid, discharged or not) got to do with it? The only exceptions I can think of is whether they might have been convicted of ML related offence in the past.
It's not that it isn't allowed, we just don't use the Criminal Records Bureau it's the Scottish Criminal Records Office therefore Scottish criminal history won't appear on CRB. SCRO decided to move away from the old Disclosure Scotland checks to the new Protecting Vulnerable Groups for a number of reasons. PVG is more to do with adults at risk and children.
I still don't really understand what the criminal history of a client would mean to me. Also whenever I've had a loan from a bank, I never remember being asked about my criminal past (not that I have one, honest!). Even when it was Disclosure Scotland only you or an employer could apply for your history, and I believe that still to be the case.
Kris
P.S. I saw homer and had to have him. His thinking pose and mine are pretty similar.
-- Edited by kjmcculloch83 on Friday 30th of September 2011 09:22:49 PM
Conviction of an offence brings into question the clients moral and ethical position as to whether they are a fit and proper person to be running a company.
To represent a client they must first convince me that they are of a suitable moral character for me to consider them as a client as to have clients who are not aligned to your moral compass will eventually reflect on one's business.
To a large extent, you are to others (I'm thinking HMRC here) the companies and individuals that you choose to represent.
The supervisory bodies have ethical guidlines as to what one needs to consider before taking on a client and a large part of that is the clients integrity which, where they have been convicted of a crime may to be compromised. (I'm specifically thinking ACCA rules here but all of the bodies adhere to the IFAC ethical code of conduct).
On the point about whether banks check out clients before they loan money to them. Believe me, they do (although seems quite difficult to believe after some of the loan scandals that have gone down recently).
If you have identity protection with someone like Experian (or Experian via CPP) and you apply for a loan you will get a message to say that your credit history has been reviewed.
If you are not with a company that offers these sort of services then you will probably never know that your details have been looked at.... Well, unless you wonder how the bank nknew that you have 14 maxed out credit cards!
The request to review your credit history is all buried in the loan application documentation.
P.S. Just realised how that one line reads. Sorry, not suggesting for a minute that you specifically have 14 maxed out credit cards. I was just using that scenario as an example. Hope everyone reading the original post understood what I meant.
-- Edited by Shamus on Saturday 1st of October 2011 12:13:31 AM
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
With regard to CRB checks, they are not open to everyone to use. First of all you have to be registered with CRB to make enquiries, then you can only make enquiries relating to employment (ie taking on a new employee) in specific roles (main ones being working the young people and/ or vulnerable adults but there are other jobs that require the checks done). Finally you need the other persons consent to carry out the check.
I do know that some registered employers have used the CRB system illegally, even local authorities!!
I can't think of any circumstance where an individual has to declare a previous conviction, other than certain employment. Even insurance companies cannot ask about convictions, unless they are material to the cover, and even then the Rehabilitation of Offenders Act 1974 can provide theindividual with anonimity to spent convictions.
As in most things, there are exeptions but I am pretty sure that a CRB check on a potential client would not be allowed.
Thanks everyone for your replies. I have now more than enough information to finalise my letter of engagement.
Just a final question. What proof of id would you request for partnerships and limited companies? I'm thinking personal id of the nominated partner for a partnership and a copy of the certificate of incorporation for a limited company.
Are there better options?
Thanks a million.
Fabs
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If I (or anyone else) wants to work with a bank, pension or insurance company then you are not allowed on site until you have been checked out for any criminal behaviour (spent or not), past and present financial history, etc. etc.
Right, I'm off on a hunt...
>
I'm back, did you miss me!
The rules related to rehabilitation of offenders are not applicable for people applying for work with Chartered accountants, Certified Accountants, or any Financial Services position. (so banks, insurance, pension and investment companies which is the world I come from).
see exclusions 9 and 31 in this link : http://www.homeoffice.gov.uk/publications/agencies-public-bodies/CRB/about-the-crb/eligible-positions-guide?view=Binary
I could definitely use an umbrella company to check out potential employee's (don't think that would be true if I offered only bookkeeping services but working with banks etc. opens up other rules).
Bit of a bummer that you cannot legally check out clients so you have to depend on their honesty... Which by definition may be in question.
To date all I've done is check out the companies through companies house which has been enough to satisfy me.... Still haven't attracted any self employed clients... Think that the VAT inclusive fee's might be putting off the smaller fish.
Ooh, just realised how that last line sounds. Is it ingrained in my subconscious somewhere that if a business is not incorporated then its small (which we know may follow convention but is not necessarily true).
Getting off subject there. Sorry.
Right, back to the question at hand. I'm satisfied that businesses offering financial services are exempt from the CRB rules related to employment (explaining why I had my earlier misconception) but as argued one cannot check clients out beyond the KYC rules for MLR... As usual it seems that criminals are well protected behind well intentioned laws!
Cheers for putting me on the straight and narrow.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
for limited companies the certificate of incorporation itself is easy to falsify.
Ensure that the name and address from the other evidence related to KYC tally to the name and address of the directors and the company available from the companies house website.
be extra vigilant where there is a recent change of director and address.
Keep this tied evidence together with the copy if the certificate of incorporation (and engagement letter) in the clients permanent file.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Sorry you may have misunderstood the bit in my last post regarding insurance companies, I was refering to taking out insurance cover, rather than employment, where only convictions material to the type of cover needs to be declared, and even then only if it is not spent.
You are quite right that employment in some parts of the financial sector require a CRB check, and are exempt from the RoOA 1974, along with some other professions (I believe RoOA 1974 does not apply when working for the Post Office)
I still struggle with the KYC concept when you work for a personal friend, or even a relative, that you do really know. IMO the MLR laws are there to reduce the risks when you provide a service at arms length, and never have any real direct connection to the client, other than the occassional meeting (usually at an office). In nearly all cases I have met my clients at their home (even meet their families), some are personal friends, and regularly go to there homes to collect paperwork. How much more to KYC can I get? I am more concerned about the few clients I have where I have only been to their office/ workplace, and I get the relevant proof of ID, a lot of which you could, with a bit of work, cobble together on a computer. In all honesty, if someone was in the game of laundering money, it probably wouldn't be too difficult for them to pull the wool over my eyes regarding ID.
-- Edited by Wella on Saturday 1st of October 2011 11:35:04 AM
think our minds are working along the same lines on the easily fabricated evidence (see my reply the Fabs re the the certificate of incorporation above).
seems ironic that someone could be convicted of identity theft but we would not be allowed to ask about that and we are supposed to take their documentation at face value!
The whole concept seems to be based around expecting criminals to be honest upstanding individuals!
To quote Kris's avatar... Doh!
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
What do you include in your client information pack if you don't mind me asking? I'd like to put together something similar as I don't feel I'm giving clients a clear enough picture and would like to come across as more professional.
It probably needs updated but currently includes a bit about us, some FAQ's for new clients, clients responsibilities to keep their fees down (how we want the information provided to us etc), our money laundering policy (including a list of appropriate ID) and a bit about data protection.
