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TECHNICAL ADVISORY SERVICES HELPSHEET

Initial consultations

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Published: 01 Oct 2013 Updated: 07 Jan 2021 Update History

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Contents

Technical helpsheet to help ICAEW members consider whether they can offer potential new clients initial consultations, whether they can charge for them, and other considerations.

Introduction

This helpsheet has been issued by ICAEW’s Ethics Advisory Service to help ICAEW members consider whether they can offer potential new clients initial consultations, whether they can charge for such consultations and related considerations.

Members may also wish to refer to the following related helpsheets and guidance:

Overview

It is acceptable to give potential new clients an initial consultation offered directly by the practice or via participation in initiatives such as the BAS scheme. There are, however, a number of important considerations to bear in mind as set out below.

Charging

It is a choice of the firm (to be agreed with the potential client) whether or not to charge for an initial consultation.

Clients should always be clear about what they will and will not be charged for and the basis of those charges. Before attending a meeting they should understand whether or not they will be charged for it and, if they will be charged, the basis on which fees will be calculated must be made clear as required by paragraph R330.5 of the ICAEW Code of Ethics. Firms should for instance make it clear if the meeting will only be free subject to the firm subsequently being appointed as the potential client’s advisers.

Where an initial consultation is offered free of charge but ends up with fairly detailed advice on the client’s affairs being provided, it is not appropriate to subsequently charge a client for that advice. If the initial consultation seems to be straying into detailed advice, a member is advised to stop the meeting and arrange a subsequent appointment to give the detailed advice, having first issued an engagement letter and having set out the relevant charges. Alternatively, if both the member and the client were free to continue with the meeting at the time, but the member wanted to give detailed advice and to charge for that advice, they must make this clear and only proceed with the client’s agreement which should be evidenced (preferably in writing).

Further guidance on information that must be provided about fees is available in the helpsheet Fee information.

Marketing

Care should be taken to ensure that the potential client fully understands what an initial consultation involves and any limitations of the service. Firms are advised to review the guidance contained within the Marketing helpsheet and paragraphs R115.2 to R115.3 of the ICAEW Code of Ethics to ensure they adhere to the appropriate marketing requirements.

Anti-money laundering and forming a business relationship

Appropriate customer due diligence (CDD) must be carried out in line with the CCAB Anti-money laundering guidance for the accountancy sector and should be completed before entering into a business relationship, which is defined as:

regulated) person and a customer, which arises out of the business of the relevant person and is expected by the relevant person, at the time when contact is established, to have an element of duration.

Generic information provided with no certainty of any client follow-up or continuing relationship (such as a generic report provided free of charge or available for purchase by anyone) is unlikely to constitute a business relationship.

For example, directing towards published information on Government websites regarding financial support is unlikely to constitute a business relationship, but advising on eligibility, suitability or applicability is likely to as you would have to consider circumstances specific to that client.

The best practical solution to avoid unnecessary delay is to ask for the potential client to bring their identification documentation to the initial consultation in case it does develop into a business relationship. Electronic CDD could also be considered (further guidance is available in the helpsheet Electronic client due diligence).

As with any potential client relationship, risk should be assessed and non-face to face transactions are a high risk factor in the absence of safeguards such as an electronic identification process secure from fraud and misuse, and capable of providing an appropriate level of assurance that the person claiming a particular identity is in fact the person with that identity.

Professional appointment

If the firm is giving specific or detailed (rather than generic) advice then it must apply the ethical requirements set out in section 320 of the ICAEW Code of Ethics with regard to professional appointment (further guidance is available in the helpsheet Change of professional appointment – Incoming accountant).

Firms are also advised to issue an engagement letter (see Engagement letters and privacy notices). Where firms elect not to do so at this stage, they must nevertheless disclose a number of matters to the potential client, guidance on which is available in the helpsheet What if you have not issued an engagement letter?

If in doubt seek advice

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Ethics Advisory Service on +44 (0)1908 248 250 or via webchat.

Terms and conditions

© ICAEW 2021  All rights reserved.

ICAEW cannot accept responsibility for any person acting or refraining to act as a result of any material contained in this helpsheet. This helpsheet is designed to alert members to an important issue of general application. It is not intended to be a definitive statement covering all aspects but is a brief comment on a specific point.

ICAEW members have permission to use and reproduce this helpsheet on the following conditions:

  • This permission is strictly limited to ICAEW members only who are using the helpsheet for guidance only.
  • The helpsheet is to be reproduced for personal, non-commercial use only and is not for re-distribution.

For further details members are invited to telephone the Technical Advisory Service T +44 (0)1908 248250. The Technical Advisory Service comprises the technical enquiries, ethics advice, anti-money laundering and fraud helplines. For further details visit icaew.com/tas.

Changelog Anchor
  • Update History
    01 Oct 2013 (12: 00 AM BST)
    First published
    07 Jan 2021 (12: 00 AM GMT)
    Changelog created, helpsheet converted to new template
    07 Jan 2021 (12: 00 AM GMT)
    Minor updates only for links to published draft CCAB guidance.
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