Skip to main content
WUHLD
← Back to insights

Lasting Power of Attorney Integration: How IFAs Can Add Value Beyond Investments

· 19 min

Executive Summary

The Office of the Public Guardian received 1.37 million lasting power of attorney applications in 2023-24, a 28% annual increase, yet research indicates that approximately 77% of adults over 55 lack an LPA in place. For independent financial advisers managing drawdown pensions, investment portfolios, and tax-efficient structures, this gap represents a critical vulnerability: financial plans that become unexecutable if the client loses mental capacity. The FCA's Consumer Duty (PRIN 2A) and updated vulnerability guidance (FG21/1, March 2025) create explicit regulatory obligations around capacity planning and attorney support. Concurrently, the Powers of Attorney Act 2023 introduces digital registration and enhanced safeguards through phased implementation. This article provides an operational framework for embedding LPA conversations into advisory workflows, connecting capacity contingency planning to the residence-based IHT regime and pension death benefit IHT inclusion from April 2027.

1. The Capacity Gap in Financial Planning

The scale of unaddressed capacity risk in advised client portfolios is striking. The OPG Annual Report 2023-24 records over 8 million LPAs and enduring powers of attorney on the register, with 1.37 million new applications received during the reporting year -- a 28% increase from 1.07 million the previous year.1 The OPG Annual Report 2024-25 confirms over 1 million applications processed with a 99.5% accuracy rate, demonstrating sustained demand.2 Yet despite this growth, a 2022 Canada Life survey conducted by Opinium (sample: 2,000 UK adults, fieldwork March 2022) found that approximately 77% of adults aged over 55 had not made an LPA.3 While the survey is now nearly four years old and LPA uptake may have shifted given subsequent OPG application volumes, the gap between LPA registration and the over-55 population remains substantial.

For advisory practices, this statistic takes on particular significance when examined against the typical advised client profile. Clients in drawdown, holding ISA portfolios, or benefiting from investment bonds have financial arrangements that require ongoing management decisions. Without a registered property and financial affairs LPA, no authorised person can instruct the adviser, rebalance portfolios, adjust withdrawal strategies, or respond to market events if the client loses capacity.4 The only alternative is a Court of Protection deputyship application -- a process that costs approximately GBP 2,341 or more in the first year (comprising the GBP 421 application fee, GBP 100 assessment fee, annual supervision charges of GBP 35-320, and typical solicitor fees of GBP 1,500-3,000), takes 6-12 months to process, and imposes annual reporting obligations on the deputy.5 The OPG supervised over 60,000 deputy caseloads in 2024-25, underscoring the administrative burden that deputyship entails for all parties.2

By contrast, registration of both LPA types currently costs GBP 184 (GBP 92 per application following the fee increase from 17 November 2025), with processing times of approximately 8-10 weeks as of January 2026.67 The cost differential is an order of magnitude. More critically, the temporal gap matters: during the 6-12 months a deputyship application is pending, no one holds authority to make financial decisions. For a drawdown pension holder in a volatile market, this period of inaction could materially erode the fund value. Investment strategies calibrated for sequencing risk, such as cash flow buffers or phased drawdown schedules, cannot be maintained or adjusted without lawful authority to instruct the platform.

The practical consequence for advisory firms is twofold. First, the absence of an LPA in the client's affairs represents a structural weakness in the financial plan itself -- an unmitigated single point of failure. Second, the adviser who constructs a sophisticated financial strategy without addressing capacity contingency has built a plan that may prove impossible to execute at the point it matters most. The financial plan ceases to be a living document and becomes instead a static record of intentions that no one holds the legal authority to implement.

2. The Regulatory Imperative: Consumer Duty and Vulnerability

FCA Vulnerability Framework

The FCA's finalised guidance FG21/1, published February 2021 and updated March 2025, establishes four drivers of vulnerability: health (including physical disability, severe or long-term illness, and cognitive impairment), life events (such as bereavement, relationship breakdown, or loss of employment), resilience (including low financial resilience or over-indebtedness), and capability (including low literacy, numeracy, or digital skills).8 Cognitive impairment sits squarely within the health driver and is directly relevant to LPA planning: it is the condition that triggers the need for an attorney to act under a health and welfare LPA and may necessitate the use of a property and financial affairs LPA.

FG21/1 requires firms to understand the nature and scale of vulnerability within their target market, to train staff to recognise vulnerability indicators, and to deliver flexible service that responds to individual needs.8 For advisory practices with a significant proportion of clients aged over 55, capacity planning is not an edge case -- it is a foreseeable characteristic of the client base. The guidance explicitly identifies that vulnerability may be temporary, sporadic, or permanent, and that firms should design processes capable of responding to each type. Cognitive decline, in particular, presents a progressive trajectory that may begin with subtle changes in decision-making ability before progressing to full incapacity.

Consumer Duty and Attorney Access

The Consumer Duty (PRIN 2A, effective July 2023) sharpens these expectations. PRIN 2A.6.5R states that where a person is authorised by a retail customer, or is authorised by law, to assist in the conduct of that customer's affairs -- which includes an attorney acting under a registered LPA -- the firm must provide the same level of support to that person as it would to the customer.9 This provision creates a positive obligation: advisory firms must be operationally prepared to onboard and support attorneys, not merely respond reactively when one presents.

The FCA's multi-firm review of retail banks' treatment of customers in vulnerable circumstances, published April 2025, found systemic shortcomings in how financial institutions handle attorney relationships. Most banks reviewed had limited channels available for attorneys to access accounts; app-based and online banking were frequently unavailable to attorneys. Fragmented CRM systems meant attorneys were required to repeat information across multiple contacts, and cases were delayed or lost within internal systems.10 While the review focused on banking, the operational parallels for advisory firms are direct. Platform access, discretionary management permissions, and withdrawal authority all require clear protocols for attorney engagement. Advisory practices that rely on client-facing portals for valuations, document signing, or instruction submission face the same access barriers the FCA identified in the banking sector.

Graeme Reynolds, the FCA's Director of Competition, stated at the PIMFA Wealth Vulnerability event in October 2024: "If you don't know which clients have additional or different needs, how can you ensure good financial outcomes for them? And if that is the case, how can you be meeting the bar set by the Consumer Duty?"11 The implication is clear: firms that have not identified which clients lack LPA provisions, and have not considered how attorney access would function in practice, face regulatory exposure under the Consumer Duty framework.

The Financial Lives Evidence Base

The FCA Financial Lives 2024 survey provides further context. The survey found that 61% of consumers with characteristics of vulnerability felt there were suitable ways to contact their financial services provider, compared with 72% of consumers without such characteristics.12 This 11-percentage-point gap illustrates the service deficit that vulnerable consumers -- including those experiencing cognitive decline -- face when interacting with financial services firms. For advisory practices, closing this gap requires proactive planning rather than reactive accommodation. Building attorney access protocols, training paraplanners and administrators to handle attorney enquiries, and ensuring CRM systems can record attorney details and authority scope are all operational investments that address the vulnerability gap at the point of service delivery.

3. The Powers of Attorney Act 2023: What Advisers Must Know

Legislative Modernisation

The Mental Capacity Act 2005 (MCA) established the statutory framework for lasting powers of attorney in England and Wales, with sections 9-14 defining LPA formalities, the roles of donors and attorneys, and the supervisory functions of the Office of the Public Guardian.13 The Powers of Attorney Act 2023, which received Royal Assent on 18 September 2023, represents the most significant reform of this framework since its inception.14

The Act amends Schedule 1 of the MCA to enable digital LPA creation and registration, introduces identity verification requirements for donors and attorneys, restricts the right to register an LPA to the donor only (removing attorneys' ability to initiate registration), expands who may object to registration, and requires the OPG to notify named persons when an application is received.14 Implementation is phased from late 2025, with the digital service under development and the paper-based process retained to ensure accessibility.

Key Distinctions for Financial Advisers

A distinction that carries particular significance for advisory practice is the difference between the two LPA types in their activation conditions. A health and welfare LPA can only be used when the donor lacks capacity to make the specific decision in question. A property and financial affairs LPA, by contrast, can be used while the donor retains full capacity, provided the donor has specified this in the instrument.13 This means a property and financial affairs LPA is not merely an incapacity safety net -- it is a planning tool that can facilitate managed transitions in the advisory relationship.

Consider the practical scenario: a client in the early stages of cognitive decline may retain capacity for many decisions but find it increasingly difficult to manage administrative tasks, attend review meetings, or process complex information. A property and financial affairs LPA activated during capacity allows the attorney to work alongside the client and the adviser, managing the gradual transition before full incapacity. Without this instrument in place before capacity is lost, the window for voluntary delegation closes permanently.

A second scenario illustrates the planning dimension further: a client who travels extensively or manages business interests abroad may grant a property and financial affairs LPA to a trusted family member, enabling time-sensitive financial decisions to be made in the client's absence. The LPA operates as a continuity mechanism for the advisory relationship, ensuring the adviser retains a lawful point of instruction regardless of the client's availability.

Enhanced Safeguards and Operational Implications

The donor-only registration requirement under the 2023 Act strengthens safeguards against potential abuse by ensuring the donor actively initiates the registration process. The expanded objection rights allow a wider range of persons to raise concerns with the OPG before registration is completed. Identity verification requirements, once implemented, will introduce additional procedural steps that advisers should factor into client timelines.14

The OPG's data reveals the scale of safeguarding activity: the 2024-25 annual report records that the OPG handled over 11,000 concerns reported about attorneys and deputies, with investigations of abuse rising 28% during 2023-24.1516 Approximately 133,760 LPA applications were rejected in 2024, representing a 199% increase compared to 2021, reflecting both increased scrutiny and the higher volume of applications.17 Advisers guiding clients toward LPA creation should set realistic expectations about processing timescales and the importance of accurate completion. The rejection rate, while still a small proportion of total applications, reinforces the value of professional solicitor involvement in drafting and submission.

4. LPA Integration in Practice: An Operational Framework

Identifying the Conversation Triggers

Embedding LPA discussions into the advisory process requires identifying the natural touchpoints at which the conversation is most relevant and least disruptive. Three primary triggers present themselves.

Client onboarding represents the earliest opportunity. When a new client engagement involves gathering information about family circumstances, existing legal arrangements, and financial objectives, a question about LPA status fits naturally into the fact-finding process. Recording the answer -- whether an LPA exists, whether it is registered, and who the nominated attorneys are -- creates a baseline that can be revisited at subsequent reviews. A standardised question within the fact-find documentation ensures consistency across the advisory team and prevents the conversation from being overlooked.

Annual or periodic reviews provide a recurring prompt. Changes in health status, family composition, or financial complexity may alter the urgency of LPA planning. For clients entering drawdown, reaching a significant age threshold, or restructuring their estate, the review meeting is an appropriate moment to revisit capacity contingency planning. The annual review also serves as an opportunity to verify that existing LPAs remain current: the attorneys named may have predeceased the donor, become estranged, or become unsuitable for other reasons.

Life event triggers present the most compelling context. Bereavement, diagnosis of a health condition, retirement, or the sale of a business all create moments when clients are already considering future planning. The MCA Code of Practice emphasises that a person should not be treated as unable to make a decision merely because they make an unwise decision -- the third statutory principle -- which reminds advisers that clients retain autonomy over their planning decisions.18 The adviser's role is to raise awareness, not to direct outcomes.

Establishing Attorney-Adviser Protocols

Proactive management of the attorney-adviser relationship requires protocols that address three operational stages: pre-incapacity registration, transition management, and post-incapacity administration.

During the pre-incapacity stage, the adviser should, with the client's consent, record the attorney's contact details, establish the scope of the LPA authority (whether it can be used before incapacity, and any restrictions the donor has included), and introduce the attorney to the advisory process. Some practices hold a three-way meeting between client, attorney, and adviser to ensure alignment on investment objectives and risk tolerances. This meeting serves both a practical function -- familiarising the attorney with the portfolio structure and advisory approach -- and a relational function, establishing the trust necessary for effective collaboration should capacity diminish.

During the transition period, when the client's capacity is diminishing but not yet lost, the adviser faces the most nuanced challenge. The MCA's capacity test is decision-specific and time-specific: a person is unable to make a decision if they cannot understand, retain, use or weigh the information relevant to the decision, or communicate their decision.19 IFAs are not required, nor qualified, to conduct formal capacity assessments, but ongoing suitability obligations under COBS 9A require advisers to be alert to indicators that a client may not be engaging meaningfully with the advice process.20 Maintaining relationships with the client's other professional advisers, including solicitors and medical practitioners, supports appropriate escalation when capacity concerns arise.21

During the post-incapacity stage, the attorney steps fully into the client's role. The firm's systems must accommodate attorney access, correspondence preferences, and decision-making authority. Platform providers vary in their attorney onboarding processes, and the advisory firm may need to coordinate across multiple providers to ensure the attorney can exercise their authority effectively. Documenting the onboarding procedure for attorneys -- including which platform forms are required, what identification the platform accepts, and the typical processing time for granting attorney access -- reduces friction during what is often an emotionally difficult period for the family.

Referral Pathways and Professional Boundaries

LPA integration creates natural referral pathways between advisory practices and solicitors. The adviser identifies the need and facilitates the conversation; the solicitor drafts the instrument and manages execution. Reciprocal referral arrangements can benefit both professions: solicitors advising on LPA drafting may identify financial planning needs, while advisers recommending LPA creation generate legal instructions. Formalising these referral relationships, with clear service-level expectations on both sides, strengthens the overall client proposition and positions the advisory practice within a broader professional network.

The professional boundary is clear and must be maintained: the adviser recommends that the client considers an LPA and can explain its relevance to the financial plan, but must not provide legal advice on the content, structure, or drafting of the LPA instrument itself. The FCA's regulatory perimeter does not extend to legal advice, and crossing this boundary exposes both the adviser and the firm to regulatory and professional liability. Advisers may, however, provide factual information about the two LPA types, the registration process, and the cost comparison with deputyship, as this falls within general financial planning guidance rather than legal advice.

5. LPAs and the Evolving Estate Planning Landscape

The Residence-Based IHT Regime

The residence-based IHT regime, operational from 6 April 2025, replaced the longstanding domicile-based system with a 10-out-of-20-year long-term resident test and 3-10 year tail provisions for those who cease UK residence.22 For internationally mobile clients, this change alters the IHT analysis fundamentally. An attorney operating under a property and financial affairs LPA for such a client may need to manage assets across jurisdictions while the IHT position is determined by the donor's residence history rather than their domicile of origin.

The interaction between LPA authority and cross-border asset management introduces complexity that existing LPA instruments may not have been drafted to address. Advisers working with internationally mobile clients should encourage a review of existing LPA provisions to ensure the attorney's authority is sufficiently broad to manage assets in multiple jurisdictions and to make decisions informed by the residence-based IHT framework. Where the donor's residence history straddles the 10-year threshold, the attorney may need to coordinate with tax advisers in multiple jurisdictions to determine the appropriate IHT treatment of specific assets -- a task that requires both legal authority and access to professional guidance.

Pension Death Benefits and IHT from April 2027

The confirmed inclusion of pension death benefits within the IHT estate from April 2027 significantly increases the financial consequences of decisions that an attorney may need to make.23 Unused defined contribution pension funds, currently outside the IHT estate, will be brought within scope. This change means that decisions about pension drawdown timing, fund selection, and benefit nominations carry IHT implications that were previously absent.

An attorney acting under a property and financial affairs LPA may need to consider whether accelerating drawdown before the donor's death reduces the overall IHT liability, whether the existing benefit nomination reflects the donor's wishes in light of the new tax treatment, and how the pension fund interacts with other estate assets for nil-rate band utilisation. These are sophisticated decisions that require the attorney to have access to professional financial advice -- reinforcing the importance of an established relationship between the attorney and the advisory practice. Advisory firms should consider whether their existing service propositions accommodate attorney-led pension reviews, including the regulatory and suitability implications of providing advice to an attorney rather than to the client directly.

Gift-Making and the Seven-Year Taper

Attorney authority to make gifts on the donor's behalf is restricted under the MCA. Section 12 limits an attorney's gift-making power to gifts on customary occasions to persons related to or connected with the donor, or to charities the donor previously supported, and then only of a reasonable value having regard to the size of the donor's estate.13 Where larger gifts form part of an IHT mitigation strategy, a Court of Protection application may be necessary. Advisers who have incorporated lifetime giving into a client's financial plan should ensure the client understands these restrictions before capacity is lost, so that the plan can be executed while the client retains the authority to make larger gifts directly. This timing consideration adds urgency to the LPA conversation: the planning benefit of lifetime giving diminishes as capacity declines, making early engagement essential.

Conclusion

LPA integration represents a dimension of the advisory proposition that is simultaneously underexploited and increasingly consequential. The convergence of three developments -- the Powers of Attorney Act 2023 modernisation programme, the FCA's sharpened vulnerability expectations under the Consumer Duty, and the reshaping of the estate planning landscape through the residence-based IHT regime and pension death benefit IHT inclusion -- creates both a regulatory imperative and a commercial opportunity for advisory practices.

The capacity gap is not an abstract risk. For every advised client who lacks a property and financial affairs LPA, the financial plan constructed by the adviser contains a structural vulnerability that becomes apparent only when it is too late to address. The cost differential between LPA registration (GBP 184 for both types) and Court of Protection deputyship (GBP 2,341 or more in the first year) underscores the practical case. The Consumer Duty obligation to support attorneys at the same standard as clients underscores the regulatory case. The deepening of client relationships and creation of reciprocal referral pathways underscores the commercial case.

Advisory practices that embed capacity contingency planning into their standard workflows -- from onboarding fact-finds through annual reviews to life event triggers -- position themselves to deliver genuinely holistic financial planning. As the Powers of Attorney Act 2023 provisions reach full implementation and the pension death benefit IHT inclusion takes effect in April 2027, the scope of decisions that attorneys will need to make, and the quality of professional support they will require, will only increase.

CPD Declaration

Estimated Reading Time: 20 minutes Technical Level: Advanced Practice Areas: Later Life Planning, Vulnerability, Estate Planning, Regulatory Compliance

Learning Objectives

Upon completing this article, practitioners will be able to:

  1. Identify the four FCA vulnerability drivers under FG21/1 and explain their relevance to LPA planning within financial advice
  2. Distinguish between property and financial affairs LPAs and health and welfare LPAs, including their respective activation conditions and implications for advisory continuity
  3. Evaluate the regulatory and commercial case for integrating LPA conversations into advisory workflows under the Consumer Duty framework
  4. Apply an operational framework for raising LPA planning at appropriate client touchpoints, including onboarding, periodic reviews, and life event triggers
  5. Assess the implications of the residence-based IHT regime and pension death benefit IHT inclusion for attorney decision-making authority and advisory support requirements

Professional Competency Mapping

  • FCA Consumer Duty (PRIN 2A) -- delivering good outcomes for customers in vulnerable circumstances
  • FCA COBS 9A -- suitability assessment obligations including capacity awareness
  • MCA 2005 principles -- presumption of capacity, supported decision-making, best interests

Reflective Questions

  1. How does the current advisory process within the practice identify clients who lack LPA provisions, and what triggers would prompt the conversation?
  2. What protocols exist for onboarding and supporting attorneys who present to manage an existing client's financial affairs?
  3. How might the pension death benefit IHT inclusion from April 2027 change the scope of decisions an attorney needs to make, and is the practice prepared to support those decisions?

Professional Disclaimer

The information presented reflects the regulatory and legislative position as of 4 February 2026. Regulations, tax rules, and professional guidance are subject to change. Readers should independently verify all information before acting and seek advice from appropriately qualified solicitors, financial advisors, or other professionals for their specific circumstances.

Neither WUHLD nor the author accepts liability for any actions taken or decisions made based on the content of this article. Professional readers are reminded of their own regulatory obligations and duty of care to their clients.

Footnotes

Footnotes

  1. OPG Annual Report and Accounts 2023-24 (HC 100). https://assets.publishing.service.gov.uk/media/66a1092ffc8e12ac3edb03ff/opg-annual-report-and-accounts-2023-to-2024.pdf ↩

  2. OPG Annual Report and Accounts 2024-25 (HC 1078). https://assets.publishing.service.gov.uk/media/6878c0f77ea20916863638b1/opg-annual-report-2024-to-2025.pdf ↩ ↩2

  3. Canada Life / Opinium Survey (March 2022), sample: 2,000 UK adults. https://www.canadalife.co.uk/news/four-in-five-uk-adults-do-not-have-a-lasting-power-of-attorney-1/ ↩

  4. Mental Capacity Act 2005, Part 1 -- Lasting Powers of Attorney, ss.9-14. https://www.legislation.gov.uk/ukpga/2005/9/part/1/crossheading/lasting-powers-of-attorney ↩

  5. GOV.UK -- Deputies: Make Decisions for Someone Who Lacks Capacity (Fees). https://www.gov.uk/become-deputy/fees ↩

  6. Changes to Lasting Power of Attorney Fees: 2025. https://www.gov.uk/government/news/changes-to-lasting-power-of-attorney-fees-2025 ↩

  7. OPG Review 2023-24 Summary. https://www.gov.uk/government/publications/office-of-the-public-guardian-review-2023-to-2024/office-of-the-public-guardian-review-2023-to-2024-summary ↩

  8. FCA Finalised Guidance FG21/1 -- Guidance for firms on the fair treatment of vulnerable customers (February 2021, updated March 2025). https://www.fca.org.uk/publication/finalised-guidance/fg21-1.pdf ↩ ↩2

  9. FCA Handbook PRIN 2A.6.5R -- Consumer support for authorised persons. https://handbook.fca.org.uk/handbook/PRIN/2A/6.html ↩

  10. FCA Multi-Firm Review -- Retail Banks' Treatment of Customers in Vulnerable Circumstances (April 2025). https://www.fca.org.uk/publications/multi-firm-reviews/retail-banks-treatment-customers-vulnerable-circumstances-multi-firm-review ↩

  11. FCA Speech -- "Vulnerability Is Not a Buzzword" by Graeme Reynolds, Director of Competition, PIMFA Wealth Vulnerability Event (24 October 2024). https://www.fca.org.uk/news/speeches/vulnerability-not-buzzword ↩

  12. FCA Financial Lives 2024 Survey -- Vulnerability and Financial Resilience. https://www.fca.org.uk/publication/financial-lives/fls-2024-vulnerability-financial-resilience.pdf ↩

  13. Mental Capacity Act 2005, Part 1. https://www.legislation.gov.uk/ukpga/2005/9/part/1 ↩ ↩2 ↩3

  14. Powers of Attorney Act 2023 c.42. https://www.legislation.gov.uk/ukpga/2023/42 ↩ ↩2 ↩3

  15. OPG Blog -- Investigations at OPG (January 2026). https://publicguardian.blog.gov.uk/2026/01/16/investigations-at-opg/ ↩

  16. OPG Annual Report and Accounts 2023-24 (HC 100) -- Safeguarding data. https://assets.publishing.service.gov.uk/media/66a1092ffc8e12ac3edb03ff/opg-annual-report-and-accounts-2023-to-2024.pdf ↩

  17. WSP Solicitors FOI data reported in MoneyWeek (2025). https://moneyweek.com/personal-finance/lasting-power-of-attorney-rejections-soar; see also OPG Annual Report and Accounts 2024-25 (HC 1078). https://assets.publishing.service.gov.uk/media/6878c0f77ea20916863638b1/opg-annual-report-2024-to-2025.pdf ↩

  18. Mental Capacity Act 2005 -- Code of Practice. https://www.legislation.gov.uk/ukpga/2005/9/pdfs/ukpgacop_20050009_en.pdf ↩

  19. Mental Capacity Act 2005, ss.2-3 (Capacity test). https://www.legislation.gov.uk/ukpga/2005/9/part/1 ↩

  20. FCA COBS 9A.2 -- Assessing Suitability: The Obligations. https://handbook.fca.org.uk/handbook/COBS/9A/2.html ↩

  21. IFA Magazine -- "What Do IFAs Need to Know About Mental Capacity?" https://ifamagazine.com/what-do-ifas-need-to-know-about-mental-capacity/ ↩

  22. Finance Act 2025 -- Residence-based IHT regime provisions. https://www.gov.uk/government/publications/inheritance-tax-changes ↩

  23. Finance (No.2) Bill 2025-26 -- Pension death benefits and IHT. https://www.gov.uk/government/publications/pension-death-benefits-iht ↩

Preview Free