There has long been a subtle issue for attorneys acting under a financial power of attorney. This centred around the fact that attorneys are not permitted to delegate their discretion, as they are managing someone else's funds. The pattern of thought has historically been that they should actively manage these, not hand discretion in relation to investments over to a fund manager. This has proved problematic time and time again where the donor held funds under discretionary management before they lost capacity, or where the attorney has been advised that the best investments for the donor's funds would be in AIM (alternative investment market) listed portfolios to allow for inheritance tax planning.

The Office of the Public Guardian guidance specifically stated that attorneys could not hold funds with a discretionary fund manager, unless the lasting power of attorney specifically included authority for them to do so. Many powers of attorney were prepared without this instruction, particularly as individuals have been encouraged by the Office of the Public Guardian to prepare LPAs themselves for many years. This meant that attorneys had to take funds back under active management or change the nature of those investments, even where this was not in the donor's best interests to do so.

STEP and other professional bodies have lobbied the OPG repeatedly over the years to change this guidance and the Office of the Public Guardian have now confirmed that attorneys no longer require specific authority to hold funds under discretionary management.

There is no details yet as to when the OPG's official published guidance will be updated to reflect this policy change but, if you are an attorney who is having difficulties with this then please forward the STEP guidance to your fund manager in the interim.

If you have any queries regarding LPAs, please contact Ashley Minott on 01494 893518.