What is Power of Attorney? The basics

Important information: the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.

Done properly, this isn’t just a legal exercise. It’s about giving yourself - and the people around you - real peace of mind, knowing that if the time comes, difficult decisions won’t be left to guesswork.

And remember, putting a Power of Attorney in place does not mean giving up control of your finances or decisions. It simply creates a legal framework for support if it’s ever needed in the future.

Use the links below to explore specific topics or continue reading for the complete guide.

1. Why a Power of Attorney matters at any age
2. Choosing the right attorney
3. Recording your wishes and preferences
4. Types of Power of Attorney
5. What a Power of Attorney can do
6. Registering a Power of Attorney with Fidelity
7. Why acting early is essential 

1. Why a Power of Attorney matters at any age

People often only associate Power of Attorney (POA) with dementia or old age. While it can be extremely important in those situations, it’s also relevant to younger adults and families planning for the unexpected.

A Power of Attorney allows trusted people to support you if you become unable to make decisions yourself. That’s why it’s extremely important to have it in place at any age because incapacity can happen unexpectedly through:

• accidents
• brain injuries
• strokes
• sudden illness
• fluctuating mental capacity

Without a POA in place, it can become much more difficult for family members to help manage your affairs. Many people assume that their spouse, parents or children would automatically be able to step in and manage things on their behalf. But legally, “next of kin” does not automatically give someone authority to access accounts or make financial decisions for you.

In many cases, if someone were to lose mental capacity before a Power of Attorney is in place, their family may need to apply to the Court of Protection to manage their affairs. This process can be lengthy, expensive and unnecessarily stressful during an already difficult time. While arrangements are being put in place, access to finances may be delayed, making it harder to manage bills, care costs and day-to-day support. 

2. Choosing the right attorney

When it comes to choosing someone to become your Power of Attorney, it’s important to think carefully about who you appoint.

For many people, the obvious choice is a close family member or trusted relative. But it’s important to also consider practical factors such as trust, reliability, availability and their ability to take on ongoing responsibilities.

Attorneys must always act in the individual’s best interests, so the role should be considered carefully.

Often, appointing more than one attorney can be beneficial. This can help share responsibility, ensure support continues if one person becomes unavailable and allows greater oversight over important decisions. If more than one attorney is appointed, it’s vital that all attorneys remain engaged and aware of decisions being made.

POA scams are on the rise. While most attorneys act responsibly and in the individual’s, best interests, abuse and financial exploitation through Powers of Attorney are increasing concerns. This makes it even more important to carefully consider who you appoint and to ensure there is ongoing communication and oversight where multiple attorneys are involved. 

3. Recording your wishes and preferences

A Power of Attorney isn’t only about managing finances. It can also help ensure your personal wishes and preferences are understood if decisions ever need to be made on your behalf.

Some people choose to outline preferences around:

• care arrangements
• housing decisions
• medical wishes
• financial priorities
• religious or personal considerations

Providing this guidance can help attorneys make decisions more confidently and ensure choices remain aligned with your wishes.

It can also help reduce disagreements within families and provide reassurance that important decisions are being made in the way you would have wanted. 

4. Types of Power of Attorney

There are different types of Power of Attorney that can be registered on an account, depending on your situation and what you need.

External Power of Attorney

These are formal legal arrangements that can cover personal or financial decisions.

• Lasting Power of Attorney (LPA) - enables someone who’s still mentally capable to decide who can deal with their personal affairs after they become incapable of acting and making decisions for themselves

• General Power of Attorney - enables someone to deal with all your financial affairs or only certain matters. A solicitor or experienced adviser will be able to grant you this.

If a person loses mental capacity, however, then a General Power of Attorney isn’t valid. Under these circumstances, it may be more appropriate to use a Lasting Power of Attorney or apply for a Court of Protection order.

• Court of Protection - if someone has already lost mental capacity, it’s no longer possible to set up a Power of Attorney. In these cases, a representative must apply to the Court of Protection, which can appoint a deputy to make ongoing decisions on their behalf.

Rules are different in Scotland. You may need to apply for an Intervention Order or a Guardianship Order instead.

• For more information read our External Power of Attorney page

Internal Power of Attorney

If you only want someone to manage your Fidelity account, you can set up an Internal Power of Attorney. This allows you to appoint a trusted person to operate your Fidelity account on your behalf, without giving them control over your wider finances.

An Internal Power of Attorney is limited to your Fidelity accounts and does not replace a full legal Power of Attorney. If you want someone to manage all of your financial affairs, you’ll need to set up a Lasting Power of Attorney (LPA) or equivalent.

• Read more about Internal Power of Attorney, including when it cannot be used 

5. What a Power of Attorney can do

Once registered, your Power of Attorney will be able to:

• Provide dealing instructions on your account (switching, adding money, and selling investments)
• Discuss your account(s) with us.
• Request copies of reporting documents, such as statements
• Receive online access to your account with your permission to use your login details. This is at your discretion and isn’t something we recommend (see online security). 

6. Registering a Power of Attorney with Fidelity

For a Lasting Power of Attorney (LPA), the donor or attorney named on the LPA will need to provide us with a unique code.

• Learn how to register the code with us. 

For a General Power of Attorney or Court of Protection, you’ll need to send us an original or certified copy of the original document by post.

• Learn more about what to send us.

For an Internal Power of Attorney, you’ll need to complete our form and send the form back to us. Please note that we can’t accept certified copies of the Fidelity-specific Power of Attorney.

• Download form

We may also need identification documents for your nominated attorney; in which case, we’ll let you know.

If your instruction is in good order, we will aim to process this within 48 hours and send you written confirmation once it is set up.

Send your documents to:

Fidelity
PO Box 391
Tadworth
KT20 9FU 

7. Why acting early is essential

While it’s not always an easy topic to think about, putting a Power of Attorney in place can provide reassurance for both you and the people around you. And one of the most important things to remember is that once mental capacity is lost, the options available can become far more limited.

Arranging a Power of Attorney early gives you greater control over your future, helps ensure your wishes are understood and can make an incredibly difficult situation much easier for the people around you. While it may feel uncomfortable to think about now, putting the right plans in place before they’re needed can make all the difference later on.

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