FINRA Tips on Power of Attorney and Your Investments

David MeyerIn some situations, if you have someone you trust to help with your investments, granting them power of attorney can be helpful. However, you have to be cautious if you decide to do this. The Financial Industry Regulatory Authority issued an investor alert providing information to individuals who are considering a power of attorney. The purpose of the alert is to help individuals from being taken advantage of by family members, friends, or financial professionals.

Some of the most important pieces of advice include the following:

  • Be cautious. Don’t feel pressured to assign a power of attorney.
  • Make sure the person you select knows your investment goals and you trust them.
  • Make the power of attorney durable.
  • See if the brokerage firm has power of attorney forms they require you to sign.

There are other suggestions to individuals such as understanding any state requirements for power of attorneys and knowing how to modify the power of attorney.

FINRA’s Senior Vice President of Investor Education Gerri Walsh made the following statement,

It's only human to avoid thinking about ever having a medical issue that affects your capacity to oversee your investments. But one way to feel more in control of your financial life is to plan for any possible problem down the road," said Gerri Walsh, FINRA's Senior Vice President of Investor Education. "Power of attorney can be very helpful but takes some knowledge to use effectively, so it's much better to learn now how it works, before an unfortunate need arises.

It is extremely important to make sure that the person handling your finances is someone you trust and is familiar with your investment portfolio. This will help to prevent you from being taken advantage of and losing your money. If you have lost money due to misconduct, call us for a free consultation to learn more about your potential case.

You can learn more about the power of attorney, and how granting this to a trusted individual can help protect investors, by watching our video below.


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