1. I just received trade instructions from the client’s son, who holds the power of attorney. He said that his mother needs additional funds to cover some extra costs associated with her recent move into a retirement residence. Is this cause for concern?
Comment: Clients can be particularly vulnerable to financial exploitation during life transitions such as a change of residence, death or serious illness of a spouse, or a medical concern. Registrants should take extra care when relying on a power of attorney or accepting a power of attorney close in time to such a transition.
2. Should a trusted contact person (TCP) be the same as the individual holding a power of attorney?
Comment: Our discussions with experts suggest that there are benefits to having a TCP be a different person than the individual holding a power of attorney. This creates some checks and balances on the account, including having multiple information sources about the client, so that the registrant is not relying solely on the individual holding the power of attorney.
3. The signed power of attorney is in the client’s file. Do I need to revisit it from time to time?
Comment: Powers of attorney can be superseded and amended as life circumstances change. As a registrant, you should take reasonable care to ensure that you are acting on the most current power of attorney.
4. What happens if an individual holding a power of attorney gives you instructions that you believe are not in the best interest of the client?
Comment: Seek advice from your lawyer as soon as possible. The situation above might occur more often than you think and it is a complex problem. (In our October bulletin, we discussed a recent case study from the Ombudsman for Banking Services and Investments involving a fact pattern like this.)