Stockbrokers - 'discretionary investment management service'

To put it simply, if you choose a discretionary investment management service you will give your manager the authority to buy and sell investments for you without obtaining your prior approval on each and every occasion. One of the major advantages of a discretionary service is that your fund manager will be able to take immediate action in response to changing market conditions - investment opportunities can be missed in the time that it takes to contact clients and ascertain their wishes.

Handing over the day-to-day management and administration of your investments to a professional manager does not mean, however, that you will lose touch with what is going on - you will receive a contract note every time a transaction is effected and detailed reviews and valuations will also be sent to you on a periodic basis.

Clearly this type of service will not suit those who want to take an active part in controlling their portfolios but, if you do not have the knowledge, inclination or time to monitor and manage your investments, it makes sense to delegate these responsibilities to someone who does.

For many private client stockbrokers, discretionary management is their flagship service but some will only offer it to larger clients.

See also: What is a stockbroker? Moneyextra's Sharedealing service

Last Updated: May 2008 © Moneyextra.com

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