Discretionary Account

An account which enables an authorized broker to sell and buy securities without the permission of client for every trade is referred to as discretionary account. In other words, it is defined as an agreement in which customer gives complete or limited authority to a broker to sell and buy securities without prior approval of the customer. However, it is worth pointing out that this account does not allow brokers to make the trade in their best interests, rather decisions made need to be consistent with the client’s objectives.