If you have invested funds with a bank or investment house you may well have given them authority to buy and sell shares or funds, much in the same way an old fashioned stockbroker may have acted for you.
These are known as discretionary fund managers or DFMs. Examples are firms such as Charles Stanley, Brewin Dolphin, Seven Investment Management, Rathbones etc.
However the problem comes if you lose mental capacity. Paragraph 7.38 of the Mental Capacity Act 2005 Code of Practice states that “the attorney must make these decisions personally and cannot generally give someone else authority to carry out their duties.
If the donor wants the attorney to be able to give authority to a specialist to make specific decisions, they need to clearly state it in the Lasting Power of Attorney document (for example, appointing an investment manager to make particular investment decisions).”
So advisers need to be clear that their client does not have any schemes such as discretionary fund management, investments held by nominees or the managers of the scheme, and perhaps also need to ensure that they are unlikely to have such an arrangement in the future. Don’t forget that DFMs can also be managing pension funds within Self Invested Pension Plans.
In addition, it would be nice to allow the attorneys the possibility of investing in such a way. So in cases where the client has investments, it would be prudent to include the special wording in the Lasting Power of Attorney for Property and Affairs, just in case. Otherwise it may be necessary to rearrange long standing investment arrangements so there is no “discretionary” element involved in investment decisions.
However, when you deal with a company like Will You Ltd you would expect them to have a conversation around this to ensure your interests are protected. If you are concerned about this, please do not hesitate to contact us for advice.