Discretionary Accounts Explained
Written by Sean Budlong, CFP®
Often clients want a financial institution to manage their investments with them, but the client doesn’t want to have to worry about making day to day investment decisions. Majestic Financial has Discretionary accounts where the advisors learn what the client’s goals, risk tolerance and time horizons are and are given the authority to make investment decisions based on that individual investor's situation. While the advisors will still be in contact with the clients, the client doesn’t have to give the approval for every trade made in the account. This can be a win-win situation because the advisors can place trades when they feel it is most beneficial to the client without having to worry about getting approval ahead of time, while the clients can have confidence knowing that their advisors have the ability to make changes they feel are appropriate without having to be by their phone all the time. Many Majestic Financial advisors contribute to discretionary decisions, but Leon Bennett is the primary Discretionary Portfolio Manager.
*Disclosure: The forgoing is for informational purposes only and not intended to be a recommendation of any particular strategy. Investing involves risk regardless of the strategy selected. In a fee-based account clients pay a quarterly fee, based on the level of assets in the account, for the services of a financial advisor as part of an advisory relationship. In deciding to pay a fee rather than commissions, clients should understand that the fee may be higher than a commission alternative during periods of lower trading. Advisory fees are in addition to the internal expenses charged by mutual funds and other investment company securities. To the extent that clients intend to hold these securities, the internal expenses should be included when evaluating the costs of a fee-based account. Clients should periodically re-evaluate whether the use of an asset-based fee continues to be appropriate in servicing their needs. A list of additional considerations, as well as the fee schedule, is available in the firm’s Form ADV Part II as well as the client agreement.
