Pros and cons: Understanding discretionary investment accounts
In definition, a discretionary investment account is a form of investment management in which clients let experienced Asset Managers independently buy and sell securities without their consent. This is only possible when clients sign and agree on the terms of a discretionary disclosure, a kind of contract that will support the broker’s rights to control and manage the client’s assets without consulting them on every transaction. They would, however, make every decision based on their client’s specific wealth objectives and risk tolerance level. This set up is ideal for busy executives who don’t have enough time to manage their portfolio or even for newbie investors whose knowledge in buying and selling is limited. While a discretionary account can be beneficial to these types of clients, it also has its downsides. Let’s take a look at them here: Pros Signing up for a discretionary account assures convenience and hassle-free investment management. Having a professi