Attorneys for an LPA Must not make Investment Decisions and Must not outsource Investment Decisions !
If you have been appointed as an Attorney under a Lasting Power of Attorney and you have commenced acting as an Attorney then you need to take great care. An attorney is essentially acting as a Trustee, as such your actions are governed by the Trustee Act 2000.
This states that you are required to appoint an INDEPENDENT FINANCIAL ADVISER and agree with them an INVESTMENT POLICY STATEMENT and that the portfolio of investments should be managed by an IFA firm on an ADVISORY BASIS.
That means that the IFA must organise and monitor the investments in accordance with the INVESTMENT POLICY STATEMENT and report to you the Attorney on a regular basis.
As an Attorney you must ensure that you are fully conversant with what the IFA firm is doing with the investments.
We suggest that this is best achieved by having a spreadsheet prepared from the date you commenced your duties as an Attorney – and having a rolling quarterly valuation of all investment accounts.
Please note, this is NOT outsourcing the investment decisions, as you are controlling the investment activities of the IFA via the INVESTMENT POLICY STATEMENT.
As an Attorney (Trustee) you remain liable for any losses if you are proven to be negligent.
Taking the actions as described above, providing they are carried out purposely and with diligence is likely to provide proof that you have not been negligent.
Many Attorneys would prefer to distance themselves as far as possible from these responsibilities and so would like to hand the running of the investments to a Discretionary Fund Manager. Unless a Lasting Power of Attorney provides explicit permission to outsource investment decisions – you cannot do so.
Nor can you hand the investments over to a Restricted Financial Adviser as this would be in breach of the Trustee Act 2000.
Our firm specialises in providing advice and guidance for Lasting Powers of Attorney, if you require assistance on a professional basis, please feel free to contact us.