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Private Investment Office Independent Investment Advice Investment Management Talent Trustees Investment Responsibilities Agents of Wealth Management and Stewards of Wealth Management Wealth Management Wealth Preservation and Stewardship Concentrated Family Stock Position Family Office Investments Family Philanthropy Multi-client Family Office Charity Investments Bespoke Fund of Funds Manager of Fund Managers Monitoring Fund Managers Discretionary Management Manager Selection Asset Monitoring Individual Asset Allocation Tactical Asset Allocation Research |
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Discretionary Management
What do we mean when we say discretionary management?
Discretionary management of investments is where the client gives discretion to the investment manager to manage the portfolio, usually within specific guidelines for return and volatility.
Discretionary management contrasts with advisory management where the investment manager merely advises the client on his investments and the client retains the right to ignore this advice.
Many clients prefer to give discretionary management mandates to their investment managers if they do not feel they themselves have the necessary expertise to retain the final decision making power.
Another advantage of discretionary management is that it is clear where the responsibility for investment performance lies. In the absence of a discretionary management mandate it may be open to the investment manager to argue that it was the client’s decision to ignore the advice which led to the underperformance. This is not the case with discretionary management mandates. |