Q:
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
A:
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.

RELATED FAQS

  1. What should I do about my IRA that keeps losing money?

    <p>I have a Roth IRA and it keeps losing money and the investment firm never calls to let me know what&#39;s happening. It&#39;s ...
  2. How do I chose between an independent CFP and a bank & trust CFA portfolio manager?

    <p>I need to choose between an independent, reputable, and vetted CFP who is trustworthy and a bank and trust CFA to manage ...
  3. How do I use the IRS Free File tax forms?

    Free File is a way for taxpayers to prepare and file their federal taxes online for free. The service is available to individuals ...
  4. What is the difference between federal and state withholding tax?

    Discover whether you can file your taxes by yourself. The three main options for tax preparation are a tax professional, ...
  5. Do we have to file taxes?

    <p>Our only income is social security and a very small pension amount. We were told by our accountant that we did not need ...
  6. Why is fiduciary duty so important?

    Find out why fiduciary duty is so important, including what this legal obligation entails and an example of how it can affect ...
RELATED TERMS
  1. Advisor Account

    A type of investment account where an investment advisor works ...
  2. Investment Manager

    A person or organization that makes investments in portfolios ...
  3. Financial Adviser

    A professional who helps individuals manage their finances by ...
  4. Registered Investment Advisor - RIA

    An advisor or firm engaged in the investment advisory business ...
  5. Personal Financial Advisor

    Professionals who help individuals manage their finances by providing ...
  6. Blanket Recommendation

    A situation in which a financial professional or institution ...
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center