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Giving advice

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  • # 116831

I'm having a spot of bother with my client.

My instinct is that when I see a financial problem, I offer advice. But I keep being told to shut up and let them do that bit.

Any comment?

Thank you

Peter


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  • # 116843

Hi Peter,

If I was being told to shut up then I would disengage!

Marilyn

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  • # 116846

Hee hee hee

I thought you might say that. I'll bear it in mind, but I don't want to go down that line yet.

But thank you for saying so.


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  • # 116847

Hi there,

It depends on what you mean by 'financial advice', as bookkeepers are not authorised to give financial advice so if there is a problem with the advice you have given at a later date, it could cause you a problem. 

Secondly, even if it is something you can give advice on, I personally believe you can only help those who want to be helped! 

I hope that helps.

Thanks,

Louise

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  • # 116848

Yes. I thought of that one too - I could be wrong. But I'm also thinking that if I don't tell them about what seems risky, they might get into deep waters.

Thanks

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  • # 116858

Peter100 said:

I'm having a spot of bother with my client.

My instinct is that when I see a financial problem, I offer advice. But I keep being told to shut up and let them do that bit.

Any comment?

Thank you

Peter


Having been a volunteer in advice services in the past, I'm very wary of offering outright 'advice' to clients.  So far what I've tended to do is point them to sources of information or explain their options or just tell them I need to make them aware of something, and I emphasise that it is totally up to them what they do with the information. (unless they are doing something illegal).

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  • # 116859

Yes - but what I am calling 'advice' is what you are calling 'telling them when I need to make them aware of something.' If they are in danger of doing something they shouldn't, they need warning whether you call it 'advice' or something else.

Perhaps someone could confirm I'm correct about something. This is a charity, not a business, and they have funds so people might give for a particular reason. Now if people give towards a fund, that money cannot be spent on other things. There's no disagreement about that.

But what if there is some income that is not designated to a particular fund. If it makes any difference, this income is not a donation, it is rent on the letting of a house. They want to put this money in the fund. Now I think that is ok if they so wish but what is not ok is that they want to take it from the fund if necessary.

To my mind, this is complicating things unnecessarily and it would be better not to put it in the fund in the first place. But is it illegal? I'm not sure about that when the money was not designated.



Edited at 23 Jun 2018 06:34 AM GMT

Edited at 23 Jun 2018 06:36 AM GMT

  • 794 posts
  • # 116860

Hi Peter,

I personally would not put rental income into a designated fund. Surely they would want to see the total rental income at the end of the accounting year?

Also it would be showing false figures when sending final accounts to Charity Commission.

Plus the fact it would be so confusing trying to work out how much was still in the 'fund' to be used for designated purposes.

If they are engaging you to do their accounts then they should leave you to do your job properly as that is what they are paying you for and spend their time actually running the charity for the benefit of whoever gains from it!

Finally, when the proverbial hits the fan you will be the one in the firing line if you do something you feel/know is wrong and they are ignoring your 'advice'. I wouldn't call it advice as you are only telling them the correct way to report financial matters in the accounts not how it should be invested or whatever.

Enjoy your weekend!

Marilyn


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  • # 116861

Marilyn

Thanks for your reply. I agree they should be getting on with their charitable purposes and I'm aware that I could end up in the firing if the proverbial hits but I keep being reminded that they make the decisions - not me. They say that if they want this money in the fund I should put it there and not argue and that is final (in their opinion). I've already tried to set up a fund to accommodate their wishes and been given a good telling off for doing so.

So I'm wanting to check whether or not they would be entitled to use it for other things if necessary. They seem to think it would because it was not so designated in the first place. But I think it would not because they themselves have designated ut.

It is not unlikely they will need to use it - perhaps in two years time when they night have cash flow problems. If using it is illegal (as I think it is), I need to tell them so. Nay, I need to convince them. I think the word 'illegal' might make them jump up and take me seriously. However some of these people are family and others are friends so I don't really want to throw the word 'illegal' at them.

Peter

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  • # 116862

I think in this situation I would contact ICB for their advice. Smile

  • 794 posts
  • # 116863

Peter100 said:

However some of these people are family and others are friends

Peter

This is one of the reasons I refused to carry out any work for friends or family as it always ends in disaster.
That aside why don't you phone the Charity Commission? Hope it all works out for you anyway. Marilyn

 

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  • # 116864

Thank you for your replies. I've been trawling the internet for solutions and I think they might want a 'desiganted' fund rather than a 'restricted' fund. A designated fund is where the trustees designate a portion of unrestricted funding and out it aside for a purpose. The difference seems to be that a restricted fund cannot be reversed but a designated fund can be reversed. So if they accept that solution, I think the crisis will be over.

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