When your clients need tax-sheltered life insurance coverage, you always recommend a particular insurance agent. This agent appreciates your referrals and frequently refers clients who need accounting services to you. You, in fact, have a formal referral agreement that compels you and this insurance agent to refer client leads to one another. You sincerely believe that this insurance agent is highly competent and offers the same wide range of policies and premiums that other agents offer.
a. Do you have a duty of disclosure prior to recommending this insurance agent to your clients?
b. Assume instead that you do not have a formal referral agreement with this insurance agent, but you respect his professional skill and he respects yours?