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Giving advice to friends / family

Giving advice to friends / family

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Hi all,

Thanks for taking the time to read this.

I was wondering on how we all feel about giving *advice* to friends and family.

Can anyone provide the strict ACA policy on such matters?

I believe its a question of holding Professional Indemnity Insurance (PII) however in terms of offering general advice to friends and family where do you all stand?

Thanks for any input!



Replies (20)

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By occca
24th Apr 2014 08:16

What sort of advice?

What type of advice are you thinking of giving?

Will they pay you for it?

Thanks (1)
By ACDWebb
24th Apr 2014 08:32

Try to avoid getting too deeply involved

with family & friends.

Do father & SWMBO's SATR's and will chat about issues if asked, but otherwise tend to decline.

CIoT require one to hold PII cover against pro bono work, and that can be obtained for around £6/month

Thanks (1)
By The Innkeeper
24th Apr 2014 10:29


It usually ends in tears

Thanks (3)
Red Leader
By Red Leader
24th Apr 2014 11:32

professional or social?

I think a distinction is made by the "authorities" between a purely social relationship and one that also includes a professional element.

So if you are chatting to say, your cousin, about CGT if he sells his house and you have never done any tax/accounts work for that person AND you are chatting down the pub/at a family gathering, then I think it's outside the realms of professional activity.

It would be different if he called into your office for said chat.

My general rule is that I don't like to talk about work-related stuff in my time off, it's not relaxing. I can also see eyes glaze over if I launch into an explanation of how limited companies work, or bik rules!

Thanks (1)
By Coeus
24th Apr 2014 12:18

Hi all,


It's mainly just friends asking for advice regarding general issues: mortgages, setting up companies, becoming shareholders.


Naturally I am quite hesitant and have in the past suggested seeking advice from a previous practice employer.


No payments to be received.


Just if any of the above goes south sometimes people can look for others to blame....



Many thanks for the replies keep them coming!







Thanks (0)
25th Apr 2014 13:03

If no payments are to be received I can't see it being a problem.  In the same sense that you would advise a friend not to eat a type of unhealthy food after seeing a documentary on how it's made or read something in the paper, or helping someone with their computer for instance.

Thanks (0)
By beverly chester
25th Apr 2014 13:10

Unless you know everything about that person's financial situation, and that often is not true with friends and family as they tell you what they think you want to hear, I would say no.

I did look at a set of accounts for a family member who was in business with his brother many years ago. He simply wanted me to explain what they meant as he did not like asking bro to explain and had not been invited to the meeting with the Accountant - very much the poor relation.

I spotted that both of the brothers had put their houses on the line by way of a personal guarantee for all of the business ventures and pointed this out to the guy that asked me. He was very upset but grateful, bro never spoke to me again as he had had flack from the first guy and claimed I was stirring it! Other parts of teh Co were not in a good position and we were in recession at the time!

I tend now to say that I either don't do investment advice or suggest they seek proper professional advice from someone, pointing out that person would need to know everything about them and their family finances. Some ask me to act professionally, some scurry off! 

Having said that I cannot see any harm in directing someone to Co House to set up a Co or to HMRC to register a business but that is where it should stop.

Thanks (1)
Glenn Martin
By Glenn Martin
25th Apr 2014 13:55

Dont Dismiss it out of hand.

I do work for some friends and family and it works fine. I do charge them mates rates but I expect the same back if I want a leaking tap fixed or some gardening work.

I have looked after my sisters business from idea conception through to the expected sale next week, she has been one of my best clients always listens to my advice, gets her books to me on time and also pays her bill.

I have a mixed circle of friends from bank mangers to brick layers and I don't mind been asked my opinion if any of them have a tax or finance issue. In fact as a friend I would expect it, in the same way if I wanted a wall building I would ask my brick layer friend to do it.

if any of the advice lads to other things then I am happy to take it on all be it at mates rates but all other terms would apply as would to unconnected clients.

The only thing I would stay clear from is becoming a "second opinion guy" where your pals go back to the existing accountants an says my accountant mate says I am paying too much tax or you bill is too high etc.

Thanks (1)
By ireallyshouldknowthisbut
25th Apr 2014 14:07

I would shy away from it myself unless you know exactly what you are talking about.

People seem to think of accountants as all knowing everything but we are anything but.

When I worked in industry several people asked me to do their personal tax as they know I was "qualified". I refused, as I didnt know much about it back then. One of those people is now a long standing client who I took on much later on when I started my practice, is a contractor. He respected the fact I didn't take it on at the time.



Thanks (0)
Mark Lee 2017
By Mark Lee
25th Apr 2014 14:39

Contact the ICAEW Ethics Helpline

They can give you the Institute's position and maybe some helpful pointers too

+44 (0)1908 248 250


Thanks (0)
By Sharland
25th Apr 2014 15:43

Advice to friends and family


  My stock answer is :   "I would love to advise you but I do not think you can afford my fees"

  That usually shuts them up !


Thanks (1)
Sarah Douglas - HouseTree Business Ltd
By sarah douglas
25th Apr 2014 15:55

Just say no and run a mile

Money and Financial arguments cause the worst arguments.   Just say NO I do not give advice to Friends and Family .  Friendship is more important and Finances always tend to ruin the friendship. 

Friends and Family should know not to ask unless they want to pay the full price.  They would be exactly the same if the shoe was on the other foot.  

When it comes to your professional Idemnity Insurance no advice is free advice if you have given the wrong advice. 


Thanks (1)
By James26
25th Apr 2014 16:00


I think it was ICAEW or it might have been CIOT had arranged with an insurer £5 per month for Pro Bono upto £5k of fees per annum.  This was arranged I believe precisely to held people who weren't doing much advice.  Along with some of the others I think a certain amount of oral advice as long as it is understood to be indicative, is probably unlikely to be a problem.  Don't follow it up with an email or if you do, make it very clear in the email that you don't accept any liability and that they should take paid for advice before proceeding to take any action.  Roughly to the normal level you would go to with a prospective client before you sent them an engagement letter etc.

Thanks (0)
By memyself-eye
25th Apr 2014 16:16

the first question is always free

"Do you give tax advice?"


"can you tell me......"

"You had your free question, the 'can you tell me' one is £100...please"

works every time.

Thanks (2)
By Flash Gordon
25th Apr 2014 16:28

Advice v working for

I don't mind giving the odd bit of general (i.e. vague) advice but I'm not keen these days on friends becoming clients (or vice versa). I still have one friend whose accounts I do (at a fairly normal rate) but I wish I didn't. I've had others where it's gone pear-shaped. Luckily I don't have that many friends so it's less of an issue :) 


Thanks (1)
Replying to johnhemming:
Red Leader
By Red Leader
25th Apr 2014 16:51

second opinion

Good advice above about avoiding being a second opinion. If they have an accountant, always refer them back to that person, "you need to ask your accountant, he's the right person to ask."

Thanks (0)
By sammerchant
25th Apr 2014 17:09

Free advice

Be very wary of 'free' advice. See Accounting Web

I stopped even pro bono work unless it is under the aegis of a charity.

Thanks (0)
Replying to Matrix:
By lionofludesch
25th Apr 2014 19:12

Out of business

sammerchant wrote:

Be very wary of 'free' advice. See Accounting Web

I stopped even pro bono work unless it is under the aegis of a charity.

Depends on the quality of the advice.   If we were all so scared of giving advice, we wouldn't be in the business.

Thanks (0)
Replying to Ian McTernan CTA:
By sammerchant
26th Apr 2014 19:26

Giving advice

I agree that giving advice is part of the accountancy  business. But giving free advice is not business. If I stick my neck out, I want to be adequately compensated for it. And I am prepared to stand behind the advice, with PI policy in hand. But free advice is deadly, especially if you could be sued or it. 

Thanks (0)
By pauljohnston
25th Apr 2014 20:55

Mates rates

My stock answer is mates rates is twice my normal rates.

I concur that acting for friends and family just causes problems and there are times when I wished I hadn't - it cost the friendship

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