discretionary account

Discretionary Account

An account that allows a broker to buy and sell securities without the client's consent. Sometimes referred to as a managed account. The client must sign a discretionary disclosure with the broker as documentation of the clients consent.

Notes:

Sometimes broad guidelines are set. For example, a client might only permit investments in blue chip stocks.

See also: Blue Chip, Broker, Managed Account

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Discretionary account

Account over which an individual or organization, other than the person in whose name the account is carried, exercises trading authority or control.

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discretionary account

A brokerage account in which the customer permits the broker to act on the customer's behalf in buying and selling securities. The broker may decide upon securities, prices, and timingsubject to any limitations specified in the agreement. Because a discretionary account can be quite risky, it should be avoided unless the customer has a great deal of confidence in the broker. Also called controlled account. Compare advisory account. See also limited discretion.