Full Power of Attorney is a type of discretionary authority that allows a third party to purchase and sell securities as well as to withdraw cash and securities without the owner’s prior consent or knowledge. This type of authority is usually reserved to trustees and attorneys.
If an investor grants power of attorney to another person it is assumed that the person will act as a Prudent Man would when making investment decisions. In most cases the investor grants limited per of attorney to another, which allows that person to make trading decisions. In rare cases the investor will grant full power of attorney, which allows the person to make trading decisions as well as deposit and withdraw securities and cash. A power of attorney, whether limited or full, is valid for three years and must be reconfirmed annually.
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