£150k to invest

[Pilchard]

Just sold the mother in law's property and had £150k to invest. We have power of attorney and there are 3 attorneys. Just been told by one of the attorneys that he has invested it in a 1 year bond with Nationwide.

My initial thought was that only £85k of this would be covered under FSCS but when I looked at the blurb on the Nationwide website it says that you can put up to £5m in one of these bonds. Does this mean any savings with Nationwide are safe up to £5m?

[bitchstewie]

No it means they don't want savers with more than £5M.

FSCS still applies.

Far as I know NS&I are the only place that guarantee pretty much unlimited savings as it's basically saving directly with the Government,

[Pilchard]

So potentially in the unlikely event of the Nationwide going under the m-i-l could potentially lose £65k?

[Simpo Two]

Pilchard said:

Just sold the mother in law's property and had £150k to invest. We have power of attorney and there are 3 attorneys. Just been told by one of the attorneys that he has invested it in a 1 year bond with Nationwide.

He's invested ALL the money of ALL the attorneys without consulting them first?

bhstewie said:

Far as I know NS&I are the only place that guarantee pretty much unlimited savings as it's basically saving directly with the Government,

Who amusingly are more skint and deeper in debt than anyone!

[Pilchard]

The investing of the money without consulting the other attorneys is another matter and will be addressed! However the PoA is written jointly and severally so they are allowed to do this but even so!

At this stage I just want to know the facts before challenging the attorney. I will also speak to Nationwide to ask if they would have let the attorney know the full £150k wouldn't be covered

[Panamax]

Pilchard said:

The investing of the money without consulting the other attorneys is another matter and will be addressed!

In what way?

This has very little to do with how the PoA was written and everything to do with how you agreed to have the bank account set up. If you allowed somebody else to have the keys to the cash tin you shouldn't be particularly surprised if they got their fingers in it. This highlights one of the many issues around "online banking". If you want genuine joint control you need to stick with old-fashioned cheques and two signatures on them.

[Mr Whippy]

Panamax said:

Pilchard said:

The investing of the money without consulting the other attorneys is another matter and will be addressed!

In what way?

This has very little to do with how the PoA was written and everything to do with how you agreed to have the bank account set up. If you allowed somebody else to have the keys to the cash tin you shouldn't be particularly surprised if they got their fingers in it. This highlights one of the many issues around "online banking". If you want genuine joint control you need to stick with old-fashioned cheques and two signatures on them.

If it’s anything like a trust structure then yes surely the accounts would need all of you to be part of the account creation stage?

I’m always baffled when people take on these professional duties and then go and treat it like a joke.
Does this person actually do anything serious for a living?

[Sheepshanks]

Pilchard said:

So potentially in the unlikely event of the Nationwide going under the m-i-l could potentially lose £65k?

Well, you say MIL but maybe the Attorney's would be liable?

[Caddyshack]

Mr Whippy said:

Panamax said:

Pilchard said:

The investing of the money without consulting the other attorneys is another matter and will be addressed!

In what way?

This has very little to do with how the PoA was written and everything to do with how you agreed to have the bank account set up. If you allowed somebody else to have the keys to the cash tin you shouldn't be particularly surprised if they got their fingers in it. This highlights one of the many issues around "online banking". If you want genuine joint control you need to stick with old-fashioned cheques and two signatures on them.

If it’s anything like a trust structure then yes surely the accounts would need all of you to be part of the account creation stage?

I’m always baffled when people take on these professional duties and then go and treat it like a joke.
Does this person actually do anything serious for a living?

Some poa say that the holder can act individually and others say altogether. The person acting needs to be very much working in the interests of the donor and can get in to trouble if they invest for their own gains.

[Pilchard]

Thanks for all the replies.

The way the attorney has acted, whilst legal (PoA is set up jointly and severally) is not what I am questioning.

I am purely asking whether there is something I am not aware of protecting the full £150k. I do know that banks allow amounts up to £1m but only for 6 months. This bond is for 1 year.

[LooneyTunes]

Pilchard said:

This bond is for 1 year.

Check the terms. Some fixed term products can be cancelled before the end of term, usually for a loss of some interest.

[Caddyshack]

One thing to note, even when northern rock went under in a big way, nobody lost any savings.

Since then, capital adequacy checks came in so I think losing money on deposit is very, very unlikely.

[Sheepshanks]

I wouldn't give it a second thought.

I've no idea why she did it but my Mum ended up with a similar amount in the bank, and then used to lie awake at night stressing about it. She thought the bank should have refused to accept her money beyond the guarantee limit.

[Enut]

If it's in a joint account cover can be uo to £170,000 and if it's the proceeds of a house sale the cover can be up to £1 million per person for up to 6 months. Worth checking with Nationwide if either of these apply.

Attorneys have a legal obligation to do their best for the person they are acting for, one would think that this would include consulting with the other attorneys even if the can act 'jointly and severally'.

p.s. I thinks it's highly unlikley that Nationwide will go belly up in the next 12 months, if it does then probably the whole country is in deep doo doo.

[darreni]

Banks would usually require all parties to the account to provide ID & signatures as part of their regulatory kyc procedures.
If you have not been involved in this, has the other party opened the account in their own name?

[Armitage.Shanks]

Pilchard said:

I am purely asking whether there is something I am not aware of protecting the full £150k. I do know that banks allow amounts up to £1m but only for 6 months. This bond is for 1 year.

I personally wouldn't be unduly concerned given the Nationwide is well established. If it went belly up I'd expect the government to step in if another banking organisation didn't swallow it up.

You and others may have a different view.

Have we ever seen a UK mainstream bank in modern times collapse and not return the initial investment to its lenders?

[alscar]

Post the 6 months temporary period,technically £65k is at risk ( assuming the account wasn't joint ) but that risk is probably pretty remote.
If the Attorney was agreed as joint and several then they have done nothing wrong as you say although the question of who has actual control over the bank account being used might be a better question.
I was one of two attorneys for my Aunt ( with my wife ) and whilst both of us had access to her money post her house sale with Nationwide with separate cheque books but only one debit card it was only me that actually did any transfers etc.