An attendee at a DBA Lawyers seminar raised concerns that some financial advisers are producing statements of advice (SOAs) with disclaimers that require an accountant to sign off on the tax advice provided in the SOA.
This can happen in a referral relationship situation in particular.
DBA Lawyers special counsel Rebecca James said the risk in this scenario for the accountant is that if there’s something in the SOA that’s factually incorrect, there may be an obligation for the accountant to point that out to the client.
“What if there’s something factually incorrect [in the SOA], or the adviser has gotten something wrong outside of the tax advice, or the information about the client’s circumstances and needs is incorrect. What's the obligation on the accountant to bring that to the client's attention? To what extent does the accountant need to scope that out?” she said.
Ms James also pointed out that these disclaimers were unlikely to be very effective for the advice firm anyway.
“If [the adviser] is registered to give tax advice and the client believes that tax advice is within the scope of the SOA and the client is relying on that advice, then you would question how effective that disclaimer is. What matters is whether it was part of the initial scope of engagement with the client,” said Ms James.
While disclaimers can be used to the extent that the client’s circumstances change, or they haven’t told the practitioner certain information, they would not be effective where the tax advice was in the scope of the SOA and the adviser is registered with the Tax Practitioners Board to give tax advice, and the client reasonably believes that they’re receiving tax advice.
“[These disclaimers] also put the client in a difficult position in terms of understanding who's giving this advice,” she said.