For advisers · Tool 03 · your own exposure
When a client’s trust is caught, the next question is often who set it up. If your firm prepared the election, the resolutions or the returns, work through these six steps first.
01
Which entity, which year, and what went wrong: a missing election, a distribution outside the group, elections that name different people, or records that can no longer prove a distribution was made properly.
02
Establish whether your firm prepared the election, resolution or return that year, or took the client on later.
03
Check engagement letters, the scope of work and any written advice on the family group and elections.
04
Your own retention period may have ended long before the client’s exposure does. Note what you hold and what you no longer have.
05
Most policies require prompt notice of circumstances that could lead to a claim. Notify before you discuss fault with the client.
06
Speak to your insurer and a lawyer before you accept responsibility or advise the client on the error itself.
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