Delta Partners is a firm of accountants and a certified person. Its current total gross annual fee income from all activities, including investment services, is €1 million. What is the maximum amount of its gross annual fee income that can be derived from investment services?

Delta Partners is a firm of accountants and a certified person. Its current total gross annual fee income from all activities, including investment services, is €1 million. What is the maximum amount of its gross annual fee income that can be derived from investment services?

• A. €200,000
• B. €100,000
• C. €330,000
• D. €490,000

Answer: (A)

A firm of accountants with a certified person is limited to a fixed percentage of its gross annual fee income coming from investment services. That percentage is 20%. Applying it to a total annual income of €1,000,000 gives a maximum of 0.20 × €1,000,000 = €200,000 from investment services. The remaining €800,000 would come from non-investment services. This cap helps prevent over-reliance on investment-related work and manages potential conflicts of interest. If the firm earned more than €200,000 from investment services, it would exceed the limit.

A firm of accountants with a certified person is limited to a fixed percentage of its gross annual fee income coming from investment services. That percentage is 20%. Applying it to a total annual income of €1,000,000 gives a maximum of 0.20 × €1,000,000 = €200,000 from investment services. The remaining €800,000 would come from non-investment services. This cap helps prevent over-reliance on investment-related work and manages potential conflicts of interest. If the firm earned more than €200,000 from investment services, it would exceed the limit.