Self-invested personal pension and small self-administered scheme providers have been told to ensure that lasting power of attorneys are correctly registered to avoid regulatory issues.
Speaking at the Association of Member-Directed Pension Scheme’s annual conference yesterday (May 21), Damien Garrould, legal director at TLT solicitors, said that Sipp and Ssas providers can protect themselves from being investigated by the Office of the Public Guardian by checking that LPA documents have been properly registered.
Mr Garrould said: "A Sipp and Ssas provider can ensure it protects itself by making sure the LPA is valid. An LPA is not legally effective until it is registered by the OPG.
"If an LPA is registered, the OPG would have officially stamped it on every page and/or the front cover."
Mr Garrould outlined six points that Sipp and Ssas providers should follow to ensure that LPA rules are complied with.
As well as training staff on how to handle LPAs correctly, Sipp and Ssas members should be made aware of the provider's own policy, said Mr Garrould.
He also said that it is important to check and keep up to date with OPG guidance and providers should include rules around LPAs in their Sipp and Ssas scheme governing documents.
An LPA allows someone, while they still have full mental capacity, to nominate a trusted friend or relative to make financial decisions on their behalf in cases of lost capacity.
The LPA regime was introduced in 2007 and replaced the previous enduring power of attorney regime.
LPAs were seen as offering better safeguards in that they had to be registered with the OPG before the person acting as attorney was able to start making decisions. This was not the case for EPAs.
The number of people signing over financial control has more than tripled in the past five years, according to data obtained from the family courts by law firm Wilsons.
The data showed the number of newly registered LPAs rose to about 800,400 in 2019, representing a 192 per cent increase on the 273,583 new LPAs in 2013.
In October 2018, the Tax Incentivised Savings Association (Tisa) published power of attorney guidelines for the financial services industry.
Tisa developed the guide with the help of The Alzheimer’s Society and a former chairman of the British Bankers’ Association (BBA).
This was after Tisa found a "clear need" for the guidelines and included a checklist of actions to be considered in the PoA process, including relevant restrictions, the roles of donor and attorney and the six different types of PoA.
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