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Should You Ever Be Your Client’ s Power Of Attorney?
Sometimes you’ re asked to be more involved with a client’ s affairs than you want to or should be. By Steve Garmhausen
CLARICE CRYSTAL SAW SAID SHE DID NOTHING wrong.
The Pleasantville, N. Y.-based former registered representative was charged in 2023 by the Securities and Exchange Commission with defrauding an elderly client of $ 2.4 million. Saw, the regulator said, liquidated an elderly widower’ s holdings after receiving power of attorney and moving his money into her personal accounts.
In a court filing the following year, Saw defended her actions. She and the client, a 90-year-old immigrant from China with no immediate family members, had developed a close long-term relationship, she said. Saw said she spoke the client’ s native language, Mandarin Chinese, and shared his ethnic background. While the client recuperated after being hit by a motorcycle, Saw added her name to the client’ s bank account, claiming she had his permission.
It’ s easy to see how an advisor could feel they were doing the right thing in such situations. A close relationship, an impaired client, and concerns that the client doesn’ t have a good alternative— all these things could prompt an advisor to step into a role that is widely understood to be fraught with regulatory and legal risk.
Indeed, many advisors have likely agreed to serve in positionof-trust relationships for clients. Thus, as clients die off or become incapacitated in coming years,“ you’ ll see more regulatory actions,” predicts Lisandra Wilmott, chief compliance officer and general counsel at Savvy Wealth.“ Right now, everyone’ s just sitting on paper saying,‘ Oh, sure, I’ ll be trustee,’— but they haven’ t had to execute on it yet.”
In Saw’ s case, according to the SEC, a power of attorney was obtained through deception, internal records at her broker-dealer were falsified, and the client’ s investments were liquidated and moved to Saw’ s personal accounts, all without the client’ s authorization. In the end, the agency ordered Saw to pay almost $ 1.4 million in penalties and disgorgement.
52 | FINANCIAL ADVISOR MAGAZINE | JULY / AUGUST 2026 WWW. FA-MAG. COM