Discretionary Investment Agreement

Discretionary Investment Agreement: What You Need to Know

When it comes to investing, you have many options available to you. One of those options is a discretionary investment agreement, which allows an investment manager to make decisions regarding your investments on your behalf.

What is a Discretionary Investment Agreement?

A discretionary investment agreement, also known as a managed account, is an agreement between you and an investment manager where you grant the manager the discretionary power to make investment decisions on your behalf. This means that the investment manager can buy, sell, and trade securities in the account without having to consult with you before making each decision.

This type of arrangement can be helpful for busy individuals who don`t have the time or expertise to manage their own investments. It`s also useful for investors who want to give up some control over their investments, while still retaining ultimate control over their investment objectives.

How Does a Discretionary Investment Agreement Work?

Under a discretionary investment agreement, you will typically work with an investment manager who will manage the investments in the account for you. The manager will have access to your account and will make investment decisions based on your agreed-upon investment objectives, risk tolerance, and investment time horizon.

Once you have provided your investment manager with the necessary information, they will use their professional experience and knowledge to make investment decisions on your behalf. They will buy and sell securities within the account, monitor the performance of your investments, and take any other actions necessary to manage your assets.

Benefits of a Discretionary Investment Agreement

One of the benefits of a discretionary investment agreement is that it allows you to delegate the investment decision-making process to an expert who has experience and knowledge in managing investments. This can help you save time and reduce the stress of managing investments on your own.

Additionally, because your investment manager has the power to make investment decisions on your behalf, they can make changes to your investments quickly and efficiently. This agility can help you take advantage of potential investment opportunities or make changes to your portfolio when necessary to help achieve your investment objectives.

Final Thoughts

A discretionary investment agreement can be a useful tool for investors who want to delegate the management of their investments to an investment manager. This arrangement can help investors save time, reduce stress, and take advantage of potential investment opportunities. However, it`s essential to choose the right investment manager and carefully review the terms of the agreement before signing on the dotted line. As with any investment decision, it`s vital to do your due diligence to ensure that the arrangement you choose is the best fit for your investment objectives and risk tolerance.

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