Meaning & use
discretionary account
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Meaning
nouncountablefinance
An investment account in which a broker or manager may buy and sell for the client without asking permission for each trade.
Grammar: Countable: she opened a discretionary account.
Patterns
- open a discretionary account
- manage a discretionary account
She opened a discretionary account so her adviser could rebalance her portfolio.
The broker made several trades in the discretionary account without calling the client.
A discretionary account suits people who lack time to follow the markets.
Word forms
| plural | discretionary accounts |
|---|
Common combinations
- open a discretionary account
- He opened a discretionary account with a wealth manager.
- manage a discretionary account
- She manages a discretionary account for several clients.
- trades in a discretionary account
- Trades in a discretionary account need no prior approval.
- fees on a discretionary account
- The fees on a discretionary account are usually higher.
- authority over a discretionary account
- The manager has full authority over the discretionary account.
Synonyms and how they differ
- managed account
- A managed account is very close, but it can include arrangements where the client still approves trades, unlike a discretionary account.
- advisory account
- In an advisory account the adviser suggests trades but the client decides, which is the main difference from a discretionary account.
- brokerage account
- A brokerage account is the general term for holding investments, and does not say who makes the decisions.
Opposites
Word family
- discretion noun
- freedom to decide for yourself
- discretionary adjective
- left to someone's judgment
- account noun
- an arrangement for holding money or investments
- discreet adjective
- careful not to attract attention, a different word
Commonly confused: discretionary account or discreet? discretionary account or advisory account?
discretionary account vs discreet
Discreet means careful and private, while discretionary refers to freedom of choice; they are spelled differently and are not interchangeable.
discretionary account vs advisory account
In an advisory account the client approves each trade, whereas in a discretionary account the manager does not need to ask.
Practice
Because Maria opened a discretionary account, her manager can ___.
Choose one answer.
A discretionary account lets the manager trade without prior approval. Suggesting trades describes an advisory account.
Make it your own
Write a sentence using “discretionary account”, then check it and compare it with the examples above.