What Is Discretionary Account?
An account where the adviser has authority to make investment decisions and execute trades without obtaining prior client approval for each transaction. Discretionary authority must be documented in writing and comes with heightened fiduciary responsibilities.
Discretionary Account across 3 exams
Discretionary Account appears on the following exams. Each defines it in the context candidates are tested on:
- Series 65
- An account where the adviser has authority to make investment decisions and execute trades without obtaining prior client approval for each transaction. Discretionary authority must be documented in writing and comes with heightened fiduciary responsibilities.
- Series 3
- A customer account in which the broker or account executive is given authority to make trading decisions on the client's behalf without prior approval for each trade.
- Series 9/10
- An account in which the customer authorizes a registered representative to make trading decisions without prior approval for each transaction. Such accounts require written customer authorization and heightened supervisory review.