1
Q
What is client money?
A
- Money of any currency of any form
- Received on behalf of another company that is not yet due or payable
2
Q
What is a complaint?
A
- An expression of dissatisfaction.
- Can be formal written or verbal
- RICS requires complaints to be handled in line with their complaints handling procedure
- Required to notify PII insurers
- Can lose clients, reputational damage & PII claims against firms
3
Q
Prior to working with a new client, what pre-appointment checks would you undertake?
A
- Ensure I am sufficiently knowledgeable, skilled & competent to carry out the work required
- Check for conflicts in line with RICS professional guidance
- Anti-money laundering checks in line with Anti-Money Laundering Directive & RICS PS Countering Bribery, Corruption, Money Laundering & Terrorist Finance
- Ensure sufficient PII
- Formalise engagement in writing issuing terms of engagement
4
Q
What procedures would you put in place to ensure good client care in a new practice?
A
- Processes for formalising terms of engagement & clear communication lines including confirming timescales, resource and the information required from the client
- Procedures for obtaining regular client feedback e.g. monthly client reviews
- Develop strategies for participating in business development
- Procedures to keep client info confidential and using non-disclosure agreements
- Reporting to clients using agreed consistently formatted documents
5
Q
Why is client care so important?
A
- Likely to retain existing clients and new business leads through positive testimonials
- Failure = dissatisfaction, complaints, and PII claims for professional negligence
- Complaints & claims can be avoided with diligence, manageable work loads & obtaining regular feedback
- Helps create a better environment to work if client’s are happy
6
Q
On receipt of a formal complaint from a client in writing, what would you do?
A
- Arrange a call with client to notify we have received the complaint and working to rectify the issue they are experiencing
- Issue client a copy of complaints handling procedure
- Report complaint to senior person in the firm or designated complaints handler
- Notify my firms PII insurers
- Arrange a meeting with the client to take on board their feedback & introduce appropriate procedures to rectify any areas of concern
-If unable to resolve, refer to RICS independent redress mechanism
7
Q
What is the difference between client and customer?
A
- Customer - individual who is purchasing goods / services. Typically one time transaction, less long term relationship
- Client - typically looks for professional service from a company, both sides work on long time goals & relationships, stronger bonds
8
Q
How would you approach a new client?
A
- Friendly, engaging and enthusiastic
- Inquisitive about key challenges
- Well presented, presentable
9
Q
What is meant by the term soft landings?
A
- Strategy to make an easy transition from the construction phase to the occupation stage
- Help to realise optimal operation performance and ensure end user can operate effectively in the asset that is delivered
10
Q
Provide an overview of your quality management procedures
A
- Peer review process
- Senior sign off
- Standardised format of documentation
- Authorisation / signature process prior to release of document
- Accessible file storage systems e.g. emails stored for absences
- Procedures for handover from staff leavers
- Internal & external audits
11
Q
What is your firm’s procedure for obtaining client feedback?
A
- Client performance reviews at key milestones within the project
- Use of KPI’s
- Regular informal communication with the client
- Lessons learned workshops at completion of the scheme
12
Q
What is a KPI?
A
- Measurable value demonstrating how effectively a company is achieving key business objectives
13
Q
What would you expect to find within an appointment document?
A
- Consultant’s obligations
- Client’s obligations
- Limitation of liability
- Collateral warranties and third party rights
- Payment
- Professional indemnity insurance
- Copyright and confidentiality
- Assignment
- Termination and suspension
- Dispute resolution
- Governing law
- Scope of services
- Exclusions and assumptions (i.e. programme)
- Client brief
- Details of complaints handling procedure
14
Q
If an estimate you had prepared was proven to be incorrect, could a client claim against you for losses?
A
Not necessarily, as the client would need to prove that the QS has warranted the accuracy of the estimate or that it was incorrect due to a lack of reasonable skill and care. For example, market conditions might have led to the estimate being incorrect which, to some extent, is outside of the QS’ control.
15
Q
What is the RICS guidance on CHP?
A
- Publish companies CHP and signpost clients
- Record in a complaints log
- Ensure employees know where complaints are logged
- Ensure PII insurers are updated if required
- Take complaints seriously, don’t assume the outcome until it is investigated
- Maintain professionalism
- Seek support e.g Lionheart
- Handle the complaint within timescales of CHP
- ADR for when complaints can’t be resolved
- If complaint uncovers a serious breach report to RICS regulation
16
Q
What is the purpose of ADR?
A
- Helps protect the public
- Enables firms to issue a referral letter to an independent body rather than continuing correspondence indefinitely
- Usually quicker than litigation, less formal
- Cheaper as designed to be accessible without legal representation
- Risk management
17
Q
What would you do when a complaint is resolved?
A
- Reflect on why the complain arose
- Identify improvements to process, communication or knowledge
18
Q
What should be included in a complaints log?
A
- What went wrong?
- Actions taken
- Any improvements to processes e.g. clearer terms, CPD to address gaps in knowledge
19
Q
What guidance documentations has the RICS published on complaints handling?
A
Complaints Handling Guidance Note - Updated January 2022
20
Q
What are the top 10 negotiation skills to succeed as set out by Harvard?
A
- Know your BATNA
- Negotiate the process - who is to be present
- Build rapport
- Listen actively
- Ask open questions
- Search for trade offs
- Be aware of anchoring bias
- Present multiple equivalent offers simultaneously
- Present a contingent contract i.e. a bet about how future events will play out such as finishing a home in time, failure leading to penalty
- Plan for implementation stage e.g. key milestones to meet and discuss
21
Q
What is communication?
A
Imparting of information by speaking or writing
22
Q
What are your views on email communication?
A
Need to take great care not to released sensitive information to incorrect parties
Can have the ability to create contract and form written instructions
23
Q
What is negotiation?
A
”- Discussion should to reach a compromise or agreement
- Informal or facilitated negotiation to agree to settle a dispute
- Concessions are non negotiable items of each party are discussed “
24
Q
What would you do following a negotiation meeting where a verbal agreement was made?
A
Look to formalise the verbal agreement as soon as possible
Done through written correspondence setting out what was agreed at the meeting and requesting a party confirmation agreement by written reply
25
What information is available referencing the handling of client's money?
RICS PS Client Money Handling - October 2019, revised October 2022 to reflect RoC
Fraud Response Plan RICS guidelines
Also information on RICS website regarding Client Money in Locum Agreements, Power of Attorney & Business Continuity Advice
26
How is the PS on Client Money Handling built up?
- RICS Client Money Protection Scheme rules
- Glossary
- Introduction
- Mandatory Requirements
- Guidance
- Appendix A - examples of client and office money
27
What is the objective of the PS on Client Money Handling?
To ensure:
- Client money is kept safe
- Client money accounts are used for appropriate purposes only
- RICS firms have appropriate controls and procedures to safeguard client's money
28
What scheme's apply from the RICS regarding Client's Money?
RICS Client Money protection Scheme - most relevant for me would be the sevice for Surveying Services
There is a scheme for Property Agents
29
What are the mandatory requirements for RICS members & firms when it comes to Clients Money?
- Must comply with RoC
- All principals in firms must ensure they and their employees comply with professional standard
- If client money is held by a subsidiary company or third party transaction service on behalf of RICS regulated firm, principals remain responsible for holding client money
- Must ensure all information and records relating to client money are made available to RICS on request
30
What must firms do in relation to holding client's money?
"- Hold in a client money account where RICS firm has exclusive control in a bank / building-society authorised by banking regulatory authority
- Ensure money account does not contain anything other than client money paid in, or any sums to replace incorrectly withdrawn money including the accrued interest on those amounts
- Not hold office money in a client account
- Accounts include the word 'client' and name of firm or identifier where a discrete account
- Ensure money is immediately available, at sacrifice of interest, unless other instruction's given by client in writing
- Where client has given instructions to hold monies in account with penalties for instant access, penalties are only paid out of client account if client has specific informed consent & not resulting in overdrawn. Otherwise, instructions to bank for penalties to be applied to office account
- Confirmation from bank needed that monies from client account will not be merged or used in relation to any other account of the firm
- Where client requires access to account, must be set up by client
31
What information must RICS firms supply to clients on handling client money?
Must confirm in writing
- confirmation client money will be held in client money account, including bank
- Account details
- Whether account is in name of regulated firm, wholly owned subsidiary or third-party transaction provider
- Advice that client's who pay fees in advance of surveying services that the money i snot covered by Client Money Protection Scheme
- How unidentified funds are dealt with
- Copy of firm's written procedures for handling client's money
32
On receipt of client money, what must firms do?
- ensure client money is paid into client account promptly
- Where mixed monies is received, pay to office / client money account promptly
- Where client instructions are to hold only part of a payment, all payment is transferred to client account, then transferring out relevant part promptly
- Account for interest accrued by client account to client unless agreed in writing
- Take prompt action to identify the owner of any unidentified client money received. Where cannot be traced, transfer to a charity where owner is not identified after 3 years from receipt
- Obtain receipt and an indemnity from the charity that all monies would be reimbursed by charity if beneficiary is subsequently identified
33
What is the process for payments from a client account?
- Each client's money only to be used for that client's matters
- Ensure money returned as soon as there is no longer any reason to retain those funds or further payments / refunds paid to client immediately
- Payments from cleitn account made to or on behalf of client on their instruction
- Where fees due, send invoice / written notification of costs incurred to client before withdrawing
- Check sufficient funds are held before makign any payments on their behalf
- Written permission for any direct debits & standing orders
- Written agreement from client before bank costs are recharged to client bank accounts
34
What must firms do if they hold client money?
- Records of all dealings including demonstrating monies held in client money account
- Systems & procedures for payments in and out as referenced in instructions received by client
- Undertake regular client account reconciliation's that are reviewed by principal or senior staff
- Publish written procedures for handling client's money on firm's website (if any) and provide a copy to RICS / persons who reasonably require
- Ensure overdrawn balances are prevented by firm's systems & controls and if these do occur, investigate & rectify immediately
- Control and protect accounting systems & client data with computer systems for access, firewalls, disaster recover
35
In relation to compliance, what must RICS firms do when handling client's money?
- Comply with anti-money laundering legislation, rules & regulations for receipts of client money
- Comply with RICS Countering Bribery and corruption, money laundering and terrorist financing PS
- Obtain certification reflective of legislation
- Ensure any breach of requirements is investigated and remedied
- Record any breach of mandatory requirements of professional standard in writing including consideration to inform RICS & client
- Inform RICS client & insurers immediately if money is misappropriated by any person
36
In relation to compliance, what must RICS members do when handling client's money?
- Comply with anti-money laundering legislation, rules & regulations for receipts of client money
- Comply with RICS Countering Bribery and corruption, money laundering and terrorist financing PS
- Follow firm procedures
- Not override any controls in place to protect client money
- Make appropriate disclosures to senior members of firm or regulator immediately if they become aware of any risk or misappropriation of client money & keep a written record of that disclosure
37
What is office money?
Refers to money belonging wholly to the RICS regulated firm / principal
38
What should be included in firm's written procedures for handling client's money?
- Reference to RICS PS
- How & where client money is held
- Access to funds being restricted to principals or senior employees
- Timescales for payment of cash & cheques to client account
- Controls for authorisation of payments from a client account
- How interest and bank charges are handled
- Information about reconciliation of accounts & checking of reconciling items
- What information will be provided to clients about monies held on their account & frequency of any reports
39
What should be included in reconciliation of client accounts?
- Should be done once per calendar month, no later than 6 weeks after the previous reconciliation
- Where only 1 /2 transactions a month, quarterly is sufficient
- Should show cashbook, lender & bank statement balances
Include list of dated unpresented cheques, dated outstanding deposits, details of any other reconciling items & client ledger balances & total of balances
- Required to be reviewed & signed by principal
- Cheques 6 months + should be cancelled, written back and reissued
- Reconciliations should not include items that are 3 months + (except cheques)
40
Can you take commission from client payments to contractors?
Where held in client money account, if stated within agreement. Must be clearly identifiable on statements to clients
41
What happens if the firm transfers money to the client account?
May be done where funds are needed for a payment on behalf of the client.
Sum becomes client money
Can only be repaid to the firm when funds are received to enable repayment
42
If payment from a client account is misdirected, is the member of firm in breach of the professional standard?
Not if:
- there are appropriate systems in place to ensure compliance
- appropriate instructions were given to the client / paying third party
- Client's mistake is remedied promptly on discovery and steps are taken to prevent future errors
43
What happens to unidentified funds in client accounts?
- Firms keep a detailed listing including date of receipt, how they were received, reference on bank statement regarding payer and amount
- Check accounting records to identify any outstanding incomes that would explain
- Writing to last known address of client
- Trying to repay the funds through banking system where possible
- Keep a record of investigation
- If identification of payee is not possible, after 3 years from receipt should pay money to charity. Firm remains responsible - require indemnity from charity
44
What happens where money is paid by error into client's account?
- Should be withdrawn / transferred promptly
- Management agreement with client should state what should happen. If not clear, take instruction on whether money to be returned or retained for further work
45
How is client's money drawn down on from a client account?
- Provide an invoice for services rendered (services rendered only)
- Charge VAT if VAT registered (turnover £85k+)
- Terms of agreement set out with the client - likely to require dual signatory
- Ensure sufficient funds in client account - cannot be overdrawn
-Inform client if commitments against client account are greater than the amount available
- If other commitments are due from the client account and their is insufficient funds, it is your responsibility to cover
46
How should client bank accounts be controlled?
- Exclusive control of firm
- Where client requests dual control, must be set up by client
- Copy of bank mandate held for each client. Should be updated when changes to signatories or every 3 years
- Letter from bank to confirm names of client account signatories, any limits or joint signing authorities, individuals authorised for online access
- Where RICS firm holds more than 3 client accounts, central list of all client accounts should be maintained
- Withdrawal only made after specific authority has been signed
- Only principals of firms should be able to authorise new signatories
- Where sole signatory, should be principal and remote from day to day operation of client's account. Otherwise should be dual signatory
- Signatories should be proven to understand requirements of the PS, firms procedures and covered by PII
- Electronic or phone withdrawals should be protected by safeguards such as passwords
47
What controls should be in place for receiving client money?
- Procedures to identify the difference between client money and office money
- Cash & Cheques received should be logged and procedures to check all funds are banked
- Pre-numbered duplicate receipt given to client and other retained by firm
- Cash & cheques banked promptly
- Direct Debits should comply with Direct Debit Guarantee scheme
48
How does the RoC relate to handling clients money?
- Rule 1 - Act with honesty and integrity and comply with professional obligations (e.g. holiday cover for signatories)
- Rule 2 - Maintain professional competence and ensure services are carried out by competent individuals
- Rule 5 - Confidence in profession (known procedures for whistleblowing )
49
How should firms comply with anti-money laundering standards when handling client's money?
- Ensure all money held is linked to surveying activity being undertaken
- Duty to remedy breaches lies with person causing breach and the regulated firm
- Principals have a professional obligation to replace missing client money from own resoruces
- Principals must report any client money misappropriateion to RICS immediately
- Firm should report and client money misappropriation to police and record any reports made. If not reported, must record reasons why
50
What is the Client Money Protection Scheme?
- Allows firms to offer client money protection
- Compensates Clients of RICS registered firms for losses resulting from a firm failing to account for Client Money to the person entitled to it
- Only applies to Registered Firms activities in UK
- Protects public for reimbursement where all other avenues have been exhausted
- Claims and queries to the Scheme Administrator
- Every RICS registered firm that holds client money must become a Member of the Scheme
51
What is required for membership to Client Money Protection Scheme?
- Required to be a member as part of provisions for RICS Registered Firms
- Membership ceases if firms ceases to be RICS registered. Cover ceases with effect from date that membership is cancelled
- Levies payable annually, amount due is published on Scheme's Website and members notified before next financial year
- Scheme Administrator reviews membership on an annual basis
52
What must Client Money Protection Scheme members do? Talk through the process of handling a client's money
- Maintain 1+ Client Money Accounts where all Client Money is aid
- Client Money Account most be designated as such and be easy to distinguish from other accounts of the member
- Clients of member must be notified of the details of the account
- Confirm in writing to the bank that bank acknowledges Client Money must bot be combined with any other account maintained by the member
- Keep records of the accounts showing all dealings with Client Money
- Must comply with procedures for handling Client Money
- Publish procedures on website
- Provide a copy of procedures to anyone who may reasonably require
- Keep records of accounts showing all dealings
- Repay any client money including interest
- Hold PII
53
What is the liability for loss of client money under the Client Money Protection Scheme?
- Available for when all over avenues have been unsuccessful
- Scheme covers liability of members
- Clients shall not bear excess amounts that may be applicable
- Annual reviews undertaken by Scheme Administrator to determine relevant limits and risks
54
What are the limits to the compensation covered by the Client Money Protection Scheme?
- Covers direct losses only (no consequential)
- Offer protection when all other avenues are exhausted
- Scheme Adnimistrator may put limits per claim or cap on the liability on a financial year or exclude certain risks
- Aggregate caps that apply shall be determined with the intention it will be more than tha maximum probable loss expected to arise
- Reviewed annually with members notified to ensure opportunity to remove membership if required
55
What is the process for making claims under the Client Money Protection Scheme?
Member must:
- Submit notice in writing of any potential claim as soon as practical (to Head of Registration & Complaince, Colmore Row)/
- Acknowledgement of receipt of any claim to be given within 7 working days
- Agree to co-operate fully with investigation
- Agree to onsite vsits to the address of records and accounts showing dealings are held
- Produce all records relating to matters relevant to the Scheme
- Respond to all communications promptly
- Make every reasonable effort to minimise any Client Money loss
- Where fraud or dishonesty is suspected then details must also be reported to police
56
What would be excluded under the Client Money Protection Scheme?
- Loss of investment income
- Penalties, fines
- Loss arising outside of UK
- Loss where the client is jointly held by the Client and the client has contributed to the loss
57
What are the compensation limits under the Client Money Protection Scheme?
£50,000 per claim
£10.3m for whole financial year
Mandatories
flashcards
Decks in class (13)
# Cards
