Keeping you in the loop

This is the place to keep up to date with what’s happening in the world of financial planning. It’s full of interesting and inspirational articles, news about our team and stories of how we’re making a difference for our clients.

Grab a cup of tea, sit back and enjoy.

Make sure your Lasting Power of Attorney will work with your investment portfolio!

A Lasting Power of Attorney (LPA) is a legal document that allows someone to make decisions for you, or act on your behalf, if you’re no longer able to or if you no longer want to make your own decisions. There are two types of LPA (firstly property and financial affairs and, secondly, health and welfare) and you can choose to make one type or both. In particular, it’s important to us to ensure that our clients have drafted their LPA for property and financial affairs – should the need arise, it is vital that someone else is able to step into your shoes to deal with your financial planning. However, it’s important to get the detail right in these documents.

Guidance issued from The Office of the Public Guardian (OPG) in 2015 confirmed that instructions around property and financial affairs given by an LPA document should include a specific provision stating that, in the case of mental incapacity, a Discretionary Fund Manager may be (or may continue to be) used. Without this wording, it may be that either an existing discretionary portfolio needs to be liquidated, or you might need to seek permission from the OPG (another reem of paper to be contended with at a difficult time) to continue with the manager.

This guidance was updated in 2017, but suggest that the wording might only be needed for discretionary management offered by a bank. The new guidance did not reference the possible scenario in which the attorney seeks advice from a regulated financial adviser, who subsequently recommends a discretionary management service.

So, what does this mean for clients acting on our recommendations? It may be the case that specific wording is not needed. However, to avoid any ambiguity, we strongly recommend that our clients review their existing LPA for property and financial affairs and consider including this wording.

Of course, we discuss this at our clients’ annual review and planning meetings, but are happy to talk this through with you at any time, and put you in touch with professionals who will be able to help in drafting new documents, if required.