Not only does a mental capacity assessment protect the client and the decisions they are making, but it protects you as the professional taking responsibility for those instructions.
Who is your client?
Client identity has always been and will remain a key part of instruction-taking, whether this is done virtually or face-to-face. However, the increase in instructions being provided virtually opens the door to potential fraudulent and other identity-related offences to take place.
How do we know the individual we are dealing with really is who they say they are? How can you confirm this if someone later alleges that you never dealt with the client at all?
As the regulatory landscape continues to tighten, clients should be more accustomed to being questioned on the real source of their instructions. Belligerent challenges against these due diligence measures should give you pause.
It is not worth bringing down your business for one client who is behaving suspiciously around providing clear instructions themselves.
It is always worth considering who contacted you to arrange the appointment and being careful as to what is discussed with anyone on behalf of the client, even if this has been authorised.
The constantly evolving anti-money laundering regulations also come in to play here, with common transactions now being considered high risk due to changes in the way the instructions are provided by a client.
When comparing client ID to the person you met virtually, there are several important red flags to look out for, the presence of which should raise serious questions as to whether to continue to take the client’s instructions.
A common issue that we see is clients who have driving licences with historical addresses on them. Not only does this make the driving licence an invalid form of ID, but it can cause the client issues later down the line (such as if they were pulled over by the police) and should be rectified.
Another common issue is where clients have used middle names or changed their name on their ID documents without a lawful basis to do this (such as by deed poll or marriage certificate) – this should always be avoided.
The process involved with AML and identity checks should not be seen as a tick-box exercise. Ultimately, you need to be satisfied that the documents the client has provided are consistent with who they say they are.
