What is a Client Account? 

A client account is when a professional firm opens an account to hold a client’s assets safely on their behalf. For example, we can open a client bank account for a charity that hasn’t got a bank account of its own. 

Why Would a Charity Need a Client Account? 

This can happen for many reasons. 

A charity might be recently created and trying to set up a traditional bank account. But these can sometimes take a long time to set up, often several months. We can open a client account much faster. It can be a useful temporary stop-gap. This allows the charity to accept funds from donors. It also lets them start spending on their mission earlier. 

A charity might also have problems opening a traditional bank account. It could fall foul of a bank’s due diligence checks. . As the banks system focuses on risks around companies and individuals, rather than charities. A charity might consider something beneficial, but the bank may see it as high-risk.  Examples may include: 

• Trustees based overseas or with particular lived experiences; 
• Large incoming grant payments, especially from overseas; 
• Payments to partners based in unusual locations. 
• Once refused, it can make it even more difficult to open an account elsewhere. 

Our client accounts solve these problems. When opening one, we conduct our own due diligence, not the bank. We understand how charities generally operate. We can gain a much more nuanced understanding of what a charity is doing.  

This doesn’t mean that our due diligence is any less robust. Instead, each charity’s individual context forms the basis. Once we are happy, the bank is happy too. 

Some banks don’t offer everything a charity needs. For example, a charity may have a Pound Sterling account at their bank. But they may not be able to open a US Dollar account. A USD client account with Stuart Davis Consulting could be used instead. 

Some donors request that their funds are held in a separate bank account from the charity’s other funds. A client account would act as this separate account. This is especially useful if the donor wants to send funds quickly, and opening a new traditional account will take too long. 

How Does a Client Account Operate?  

A client account acts like a normal bank account. You can receive payments in and make payments out as you normally would. We would undertake checks around unusual payments, just as a bank would. Unfortunately, you also get the usual bank charges. The main differences to a normal account are few: 

The account name will be in the format (“SDC re: [charity name]). This shows the bank that it is one of our client accounts. 

Stuart Davis Consultancy would be one of the signatories on the account. Other signatories would be added, normally a trustee the CEO and Office Manager. 

It would act like a normal business account. So, it isn’t subject to any discounts that a charity or community account might be able to get. 

The balance can’t go negative.  

Can Any Charity Get a Client Account With You? 

 It’s at our discretion whether to open a client account for a charity. We’d want to understand what the need is, and we’d undertake our due diligence process. But if you meet those tests, we’d happily consider it for any charity. 

Are Our Charity Funds Safe in a Client Account? 

 Yes. We ringfence all our client accounts. In the unlikely event that anything happens to Stuart Davis Consulting, your charity’s funds are legally held separate from our own funds. The bank must ensure their protection. We also have a continuity agreement in place with another firm. This ensures that someone can take over our clients with minimal fuss. 

 If the bank fails, it will protect your charity’s funds in the same way as any other bank account. 

How Do You Prevent Theft and Fraud? 

 We split tasks. For example, the person raising payments does not reconcile the account. You must approve any payments to be transferred out in advance. We also provide monthly statements and reconciliations. When possible, we’ll help set up live bank feeds to your accounting software so you can track balances in real time. 

Are You Regulated? 

 Yes. Under financial regulations, a client account can only be opened by a regulated firm. This is either: 

• One on the FCA’s register of financial firms. 
• A professional firm like an accountant or a solicitor that is regulated by their professional body. 

In our case, we hold a Member in Practice licence from the Chartered Institute for Management Accountants (CIMA). CIMA also supervises us for the purposes of Anti Money Laundering Regulations. 

What Does It Cost to Have a Client Account for My Charity? 

 You’d need to cover the bank’s own fees, just like any other account. We may charge you for setting up a client account and for providing bank reconciliations if we are not providing other services.  

We don’t charge you for holding funds in our accounts. For example, we don’t take any percentage of donations deposited with us. They’re your funds, and we want you to spend them on your mission, not our overheads. Instead, we cover our operating costs from the interest we earn on the funds you hold with us.