Sooner or later, a client becomes unable to manage their own affairs and an agent steps in under a Power of Attorney. For a financial advisor, that transition raises real questions: Is this document valid? What can this person actually do? How do I protect my client — and myself? Here’s a practical guide.
Verify the authority
Start with the document. Confirm it’s the right client, that it’s durable (so it survives incapacity), whether it’s already effective or springing, and which powers it actually grants over investment and financial matters. Don’t assume “Power of Attorney” means unlimited authority — the document defines the limits.
Keep the client at the center
Your duty still runs to the client, not the agent. The agent is bound by their own fiduciary duty to act in the client’s interest — so a request that seems to benefit the agent, or that doesn’t fit the client’s history and goals, deserves a careful, documented second look.
Watch for exploitation
Advisors are uniquely positioned to catch financial abuse early. Sudden strategy changes, beneficiary changes, isolation of the client, and resistance to oversight are red flags worth slowing down for and escalating through your compliance process.
Know your line — educate and refer
You can explain how the process works in general terms, but questions about what a specific document legally permits belong with the client’s attorney. Knowing when to refer protects everyone and builds trust.
Becoming the professional families trust in these moments is exactly what the POA Caregiver Professional Program certifies — and we deliver team training and continuing-education sessions for firms.
_This article is plain-English education, not legal advice. Power of Attorney law varies by state, and reading it does not create an attorney–client relationship. For guidance on your specific situation, talk with a licensed attorney in your state._