I had a call from someone and essentially, he wants to do an exchange of services. He sees his client professionally and the client does work in his house. He is wondering if this is ok . Seems to me that this could go all kinds of wrong.

You are absolutely right: Not a good idea for many reasons as you say. This would be unacceptable dual relationship and conflict of interest and exchange of services has been the subject of complaints in the past. There are several standards that would support not doing this, but in this case, I would not even get into them but be more Black and White as I have been above.