A discretionary account is an account where the client has given the financial advisor the authority to make trades on the account without prior approval from the client. The advisor has discretion over how the account is managed, including what trades are made and when they are made.
What does discretion used mean?
Discretion is the power or freedom to decide or act according to one's own judgment. In accounting, discretion refers to the ability of management to make decisions about the timing and amount of accounting recognition and disclosures. For example, management may have the discretion to choose when to recognize revenue or when to record a expense.
How do you use discretionary? Discretionary spending is spending that is not required by law. It includes items like travel, entertainment, and luxury goods. Discretionary spending is often considered to be more flexible than mandatory spending, as it can be reduced or increased more easily in response to changes in income or economic conditions. What is a non discretionary bank account? A non discretionary bank account is an account where the account holder does not have the discretion to make withdrawals or transfers. The account is typically managed by a third party, such as a financial institution or investment firm.
What is considered a discretionary trade?
Discretionary trades are those that are not part of a pre-planned trading strategy, but rather are made at the discretion of the trader. This could be based on a number of factors, including market conditions, current positions, and personal circumstances.
What is a nondiscretionary managed account?
A nondiscretionary managed account is an investment account in which the investor has given the investment manager explicit investment guidelines that the manager must follow. These guidelines may include asset allocation targets, sectors or industries to avoid, and specific investments to buy or sell. The investor may also set limitations on how much the manager can deviate from the stated guidelines.