This entire area is dealt with by the requirements laid down with by our regulatory body Institute of Chartered Accountants in England & Wales, Anti Money regulation and “Know your Client “KYC” practice, together with other legislation.
Principally, it is dealt with in accordance with the instructions of and with the agreement of the Client. whether they be standing instruction, given at the outset or instructions given at that time.
Such instructions may be given verbally (all telephone calls are recorded), confirmed via Telegram or given in writing.
Avar has the sole discretion as to whether it choses to accept money from a source to be held for the benefit of the Client.
What is Client Money?
Money of any currency which a firm holds or receives for or on behalf of a client.
Not immediately payable on demand to the firm for its own account e.g. Fees.
It must be held in the same currency in which it was received, unless the client instructs otherwise in writing.
What do I need to do before I can receive clients’ money?
Verify identity of the client.
Open a client bank account, which should have the client or clients in the title.
Get confirmation from the bank that the account has a trust status.
Appoint an alternative with authority to operate the account for the protection of the Client.
When should I open a separate designated clients’ bank account?
If the firm expects to hold more than £10,000 for a client for more than 30 days.
Firm cannot over-ride this requirement by getting the client’s consent to keep money in the general account.
How often do I need to reconcile my client accounts?
At least every five weeks.
What if the bank has been charging the clients’ account with bank charges?
Make good by transferring funds from the office account and instruct the bank to charge the office account in future.
Such costs and interest belong to Client.
What to do if old balances can not be traced to the client?
The firm could pay it to a registered charity, if the client has not been traced for five years.
If the amounts are over £10,000 for each client, the registered charity should provide an indemnity against future claim by the client.
Is the flow of Client money insured?
The monies are protected by the fact that all sole practitioners are required to have an alternate who is able to disburse the monies according to the clients wishes.
An alternate is the suitably qualified individual or firm appointed by a sole principal (sole practitioner or sole director of a corporate practice) to continue the running of their practice in the event of their death or incapacity.
Regulation 31 of the Clients’ Money regulations requires any sole practitioner who holds clients’ money to notify Institute of Chartered Accountants in England & Wales of their alternate arrangements.
