Investing Under a Lasting Power of Attorney

Ask the Expert

“My mother has recently appointed me as her power of attorney as she wants me to manage her savings and investments. I’ve checked her investments, and she is not making much money, so I think she should change her portfolio. Can I make changes to my mother’s portfolio?”

Carl responds:

As your mothers’ lasting power of attorney (LPA), you must be following the core principles – make decisions in your mother’s best interests and follow the Code of Practices while being aware of the limits and extents of the authority. This does mean that you may have to ignore your own feelings about the level of risk she is taking with her investments.

If your mother still has mental capacity, you should discuss any changes you’d like to make to her portfolio with her. If she feels comfortable with the changes you’d like to make, then it may be worth speaking to her Financial Adviser about getting the right balance in the portfolio. Your mother’s Financial Adviser has the right to be cautious and may check that your mother is happy with your decisions. You may find that the Financial Adviser checks that your mother has registered and certified LPA and has given you consent to act on her behalf.

LPA rules can be quite specific, and you may find that your authority reduces when making investment decisions. You must support your mother to make decisions herself about her money. You will need to find a balance between what your mother wishes and what is in her best interests; any decisions you make must be based on your mothers’ preferences and beliefs.

As an LPA, you cannot delegate decision-making to someone else, but you can seek professional help from a financial adviser. However, there could be issues if funds are intended to be discretionary managed. The power of attorney document must have included specific instructions for your mother’s funds to be managed by a Discretionary Fund Manager (DFM).

Any opinions expressed in this article do not constitute advice.  The value of an investment and the income from it could go down as well as up.  The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.