discretionary account investment & finance definition
An investment account that gives the broker
discretion to purchase and sell stocks and other investments without obtaining
the prior approval of the account owner. The broker should have broad
guidelines to follow that spell out what types of investments are allowed and
explain what types of risks are permissible.
See discretionary account in Wall Street Words
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 timing—subject 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.
Learn more about discretionary account