Question of the Week

Your firm is a registered investment advisor that specializes in investment management with 400 clients across all 50 states. Your firm has no certified public accountants on staff. However, you are a CFP and one of your clients calls you to file his 1040 IRS tax form. Although you are not a CPA, you have filed your own return for the last 10 years and are quite knowledgeable on the subject. You should do which of the following?

A) Call a friend of yours that is a CPA, and split the account fee with him to file the return
B) Recommend that the client seeks a certified public accountant in his area
C) Under your fiduciary duty, you should file the return for your client
D) Ask the client to fax you his tax documents, and help him electronically file his return

Answer:

The correct answer is b:

As a professional, you must be able to recognize when clients make requests for services that are beyond the scope of your expertise. You should then advise them to seek the help of a more qualified professional in that field.

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