Account Authorizations: Power of Attorney

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Chapters in this video

  1. 0:00 Only the customer can trade until paper says otherwise
  2. 1:58 Full POA is the house key, limited POA is the car key
  3. 3:36 Durable survives incapacity, non-durable dies with it
  4. 4:43 Death revokes every POA immediately
  5. 6:23 Revocation: written notice to agent and firm
  6. 7:02 Rapid-fire exam recap

What this video covers

  • The three basic requirements for a valid power of attorney (POA) at a broker-dealer (BD): written form, principal signature, and executed copy on file before any transactions
  • How full POA differs from limited (trading) POA: full allows trading and withdrawals, limited allows trading only, and why outside money managers must receive limited POA
  • How durable POA differs from non-durable POA: durable survives incapacity only if expressly stated, non-durable terminates automatically at incapacity
  • Why all POAs, durable and non-durable, are immediately revoked at the principal's death, freezing the account pending estate documents
  • Why a trade executed by an agent after the principal's death must be reversed, even when the agent acted in good faith and was unaware of the death
  • How a principal revokes a POA: written notice to both the agent and the firm, effective upon receipt and logging by the firm

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