Client Money Handling Procedures
As an RICS Regulated Firm, we have in place a “Client Money Handling Procedure” to ensure that our Client’s funds are properly protected. You can view our full procedure below, or you can view read the RICS Professional Standards for Client Money Handling here.
Client Money Handling Procedure
The Firm shall preserve the security of clients’ money entrusted to its care in the course of its practice or business. Our aim is to ensure that clients’ money can be clearly linked to whom it belongs, and it always protected on their behalf and, in particular, in the following circumstances;
- Misappropriation by any party
- Transfer of client money to another organisation
This Policy document should be read in conjunction with the RICS Client Money Handling professional statement (1st Edition, October 2019).
The whole of this document is taken to be the Firm’s written procedure for Handling Client Money in accordance with the RICS Rules of Conduct. These written procedures set forth to ensure compliance with:
- The RICS Rules of Conduct for Firms
- The RICS Client Money Protection Scheme
- Any other regulations or statutory requirements as necessary, and to maintain best practice.
A key aim of these written procedures is to ensure that client money is held in accordance with Rule 8 of the RICS Rules of Conduct as follows;
“A Firm shall have in place the necessary procedures to ensure that all its staff are properly trained and competent to do their work.”
The Firm ensure that:
- Employees have clear segregation of duties and responsibilities and that a Principle or an appropriately qualified person oversees the client accounting function;
- It employs competent and knowledgeable staff who are responsible for processing clients’ money and who are familiar with RICS rules and this procedure;
- Accounting systems and client data are securely controlled and protected;
- Computer systems are adequately protected for access, firewalls, back-ups and disaster recovery;
- There is adequate cover for holiday and long-term absence;
- Principles cannot and do not override controls surrounding the accounting system;
- All areas of the business apply the same level of controls in relation to the client accounting function.
Client Bank Accounts
The Firm ensure that:
- We hold clients’ money in one or more client bank accounts separate from all other monies and Client money is available on demand.
- The Client Money bank account is correctly titled to include the name of the firm and the word “client” to distinguish the account from an office or any other account. If it is a discrete account, the name of the client is included in the title;
- We advise clients in writing of the bank account details (account name and number) and agree the terms of the account handling, including arrangements for interest and charges;
- We have obtained written consent if the Firm is to retain interest.
Client Accounting Systems and Controls
The Firm ensure that:
- Accounting records and systems are appropriate to the nature and volume of client account transactions;
- Systems provide details of all money received into and paid from all client accounts and show a running balance of all client money held in that account;
- Systems identify all receipts and payments to the client to which they relate; for example, by means of client ledgers showing case balances held on behalf of clients at all times;
- Accounting records are completed chronologically and promptly;
- All ledgers have the client name and appropriate description (e.g. the case reference of the property address).
- Overdrawn balances on client ledgers are prevented by the systems or controls in place and where they do occur are investigated and rectified immediately;
- Adequate controls are in place over unidentified client money to ensure that such funds are kept securely. The client should be located and reimbursed as soon as possible. Such funds held for more than six years may be donated to a registered charity;
- A central list of client bank accounts is maintained including dates of opening and closing of accounts;
Reconciliations should not include regularly occurring adjustments or reconciling items more than three months old, except for unpresented cheques which should be no more than six months old.
- Reconciliations are reviewed and signed off by a Principle or by an appropriate independent senior member of staff;
- Client accounting records, including copies of reconciliations, are securely kept for at least six years plus the current year.
Controls Over the Receipt of Client Money
The Firm ensures that:
- All post is opened by a member of independent staff who is aware of the Client Money Handling Procedure and logs and records all funds received;
- Procedures exist to ensure that all clients’ money is banked within three working days;
- All cash and cheques received by post or by hand are promptly recorded;
- A reconciliation is performed between money received by post and that day’s banking;
- Procedures exist to identify and distinguish between money received by post and that day’s banking;
- Procedures exist to identify and distinguish between clients’ and the Firms’ money;
- If received, mixed monies are initially paid into a client account and the office element paid to the office account when the receipt has cleared the bank;
- Unbanked client money receipts are kept securely in a locked draw.
Controls Over the Payment of Client Money
- Checks are made to ensure that sufficient funds are held on behalf of the relevant client before payments are made;
- A copy of the bank mandate it held and is up to date;
- Only Principles are authorised to make payments out of Client accounts and adequate supervision procedures are in place for payments made by cheque, bank transfer and electronic methods;
- All payment requests have supporting evidence and documentation has been authorised in advance by an appropriately qualified person;
- Blank cheques are not signed, and unused cheques are kept securely;
- Effective controls are in place over the setting up of new supplier accounts on the system;
- Cash payments are not accepted.
“Company” and “Firm” means Thomson Broadbent Property Compensation Limited and its direct and indirect subsidiaries or holdings companies (as defined in the Companies Act 2006) and any subsidiary company of any holding company.
The following relevant defined terms have been extracted and where appropriate amended from the RICS Client Money Protection (October 2019).