Can I direct that my power of attorney use my favourite financial advisor?

Most people realize that when they appoint an attorney under an Enduring Power of Attorney, the person they name will be responsible for handling their money and investments. Sometimes, the attorney is in charge for a very long time.

This concerns a lot of people. They fear that the person they appoint will invest foolishly or recklessly and end up losing a big chunk of the nest egg the person spent his or her life accumulating.

I can see where this fear comes from. Think about the fact if you should lose mental capacity and your attorney has to take over, that person might be running your financial affairs for years. You're dependent on that attorney to look after things and should there be a big financial loss, you're the one whose lifestyle or long-term care will be reduced accordingly.

When clients express this fear to me, I try to get to the bottom of it. I ask what they would like their attorney to do once they take over. I ask what would give my client peace of mind that their attorney wouldn't do anything foolish with the money. Often, their answer is that they'd like their attorney to keep the investments with the financial advisor they now have.

Good financial advisors have an extremely loyal following, I've noticed. They know their clients really well, usually for many years. The advisors understand their clients' philosophy about saving, spending and investing and understand each client's tolerance for risk. The advisor helps with home ownership, business profits, investments, business succession planning, retirement planning, insurance planning and estate planning. The client trusts that the advisor will be able to steer the attorney towards the same solutions the client himself or herself had desired.

It's possible to include a clause in your Enduring Power of Attorney that expresses your wish that your attorney continue to use the financial advisor you now use yourself. You can't make this an absolute order, because you can't fetter your attorney's discretion that way. Also, your advisor could have retired or passed away by the time your document is used.

This is not a clause that would appear automatically in an Enduring Power of Attorney. It's something that would be included only where it was applicable to a client who expressed an interest in having it in the document.

I've noticed that this clause is extremely popular with clients. It tends to make a terrifying possiblility a little less terrifying by giving the clients a way to help control outcomes. Financial advisors tell me that they like the clause too, because often they know their client's families and they'd like to continue working with the families.

If you have a financial advisor you like and trust, talk to your estate planning lawyer about having this kind of clause included in your Enduring Power of Attorney.