DEFINITION of 'Limited Power Of Attorney - LPOA'
An authorization form used in the professional money management field which gives a portfolio manager discretion to perform certain functions in a client's account, such as:
- trading authorization,
- disbursement authority,
- fee-payment authority and
- have forms sent straight to broker, such as proxy statements, tender offers, etc.
The "limited" in LPOA refers to the fact that certain critical account functions are still only available to the account holder, such as cash withdrawals, a change of beneficiary or other major account actions.
BREAKING DOWN 'Limited Power Of Attorney - LPOA'
LPOA authorizations have grown rapidly in the past decade as many investors move their accounts from standard brokerage firms to boutique money management firms (such as RIAs). LPOAs allow the manager to execute their investment strategy for the client without constantly having to contact the client to approve the order prior to execution.