The FCA (Financial Conduct Authority) has recently published a good practice guide for financial institutions when dealing with powers of attorney. It is clear from their review that there is much more to be done to assist both customers and their attorneys when they need their help most. We review the areas for improvement and how simple steps can save those registering powers of attorney with a bank, much time and frustration.
Common problems encountered by attorneys include having to repeat requests several times, being unable to access online banking facilities or having requests lost in the banking system. These are all relatively simple mistakes and could be easily remedied by more attention being paid by the institutions themselves but also by attorneys and/or clients preparing for meetings/calls with their banks in advance.
The FCA’s Consumer Duty requires firms to act to deliver good outcomes for all customers, including those in vulnerable circumstances. The FCA found “Overall, the firms we reviewed had taken steps to refine their approach to the treatment of customers in vulnerable circumstances since the introduction of the Duty. We saw evidence of good practice in the support provided to customers, and that the Duty and our Vulnerability Guidance have had a positive impact. However, this was not universally the case. We also found areas in which all firms need to improve”.
How banks should improve their service for vulnerable customers
The areas which the FCA identified as requiring improvement included the following.
Policies and procedures
- Staff being unclear about what actions they should take and what support to provide in the event of an emergency, such as when the customer’s capacity suddenly changed or when funds were urgently needed.
- In some cases, customers and their representatives experiencing extended periods where they were unable to access funds to pay essential bills.
Identifying and responding to customer needs
- Firms should actively identify information that could indicate vulnerability and, where relevant, seek information from consumers that will allow them to respond to their needs.
- While systems were in place to record customers’ needs, it was not always clear that staff were consistently using them. There were some instances of staff failing to check or respond to support needs recorded on a customer’s profile.
- In some cases, staff did not acknowledge that customers were noticeably distressed and upset.
Outcome testing and monitoring
- Management information did not consistently give a clear picture of customer outcomes, with firms relying on data that lacked breadth and detail. There was a lack of clarity on what firms consider to be good and poor outcomes.
Customer journeys
- Most firms had a limited range of channels available for attorneys to access the account of the relevant customer. In particular, app-based banking or online banking were often not available for the attorney to use. This limitation often appeared to be due to the firm’s investment decisions, suggesting access could be expanded if resource was committed to it.
- Customers had to repeat information when speaking to different staff members, or having their cases delayed or dropped altogether because they had been ‘lost’ in the firm’s systems, risking further distress and upset.
Simple steps to registering a power of attorney with the bank
There is no doubt that further training and effective supervision of staff will improve customers’ experience. However, the rapid decrease in the number of bank and building society branches coupled with the small number of staff in remaining branches means that difficulties will continue. We recommend that clients think carefully when approaching the banks to register any power of attorney. The following simple steps can save much time and frustration.
- Arrange an appointment at the branch – telephone in advance to identify where such a meeting can take place. Not all branches will have someone on hand every day to process a power of attorney.
- Ensure you take all necessary paperwork with you – this will include either an original power of attorney, properly certified copy or access code (check in advance as to what the bank will accept), your current original identity documents, bank account numbers and sort codes for all accounts.
- If you are the donor and want to have continued access to your bank accounts as you retain capacity, then attend the bank meeting with your attorney or attorneys. Make sure you are clear as to what access everyone is to have and find out what the bank will allow you all to have. You cannot assume that you will all, for example, be allowed online or app access to your accounts.
- If you are the attorney or attorneys (and the donor has now lost capacity),it is advisable for all to attend the meeting together rather than at separate branches. You and the bank will then need to be clear as to what is being permitted. Remember the different access arrangements – in branch banking, telephone banking, banking app and online access. In addition, will they allow you a debit card or a cheque book? If there is a joint or joint and several appointment who will have those facilities?
- Find out whether the bank will allow you to open new savings accounts or be able to transfer funds between accounts both in the bank and between the bank and another bank.
- Ensure that the bank has clear contact details and find out whether they will communicate to all parties or not.
Ann Stanyer is the author of “Power of Attorney for Property and Finance: A User’s Guide”, where these difficulties and ways to resolve them are discussed. Being prepared in advance will save you and your attorneys much time and effort and ensure that your finances can be accessed and managed efficiently.
How we can help
Wedlake Bell can help you to make a lasting power of attorney (LPA) for health and welfare and/ or for property and financial affairs, and decide who the best persons would be to appoint as attorneys. We can guide you on wishes or instructions to give your attorneys to help them make those key decisions as you would.
If you would like to discuss the above, please do not hesitate to contact a member of the Private Client team.
This article is for general information only and does not seek to give legal advice or to be an exhaustive statement of the law. Specific advice should always be sought for individual cases.