Understanding the Difference Between Discretionary & Non-Discretionary Accounts

In any matter of investment fraud, it is important for your lawyer to know first off whether your account falls in the category of discretionary or non-discretionary. This is often a big part of the case and can go a long way in determining if you may file an investment fraud claim.

Watch As Attorney Dave Meyer Explains Discretionary & Non-Discretionary Accounts

If an account is discretionary, it allows the brokerage firm to operate without receiving permission from the investor before investing, trading, or selling. A non-discretionary account requires the broker to speak with the investor regarding any investment actions. Oftentimes, brokers don’t know or don’t explain these accounts to their investors. Brokers may also take on non-discretionary accounts and act as if they are discretionary accounts and invest without permission.

In either case, it is the job of the broker to provide investors with the correct investment recommendations. When this isn’t the case and brokers act without permission on non-discretionary accounts, the investor may be able to recover any losses that may have occurred.

If you had a non-discretionary account with a broker and you lost money due to unpermitted trades, unsuitable investments, or breach of fiduciary duty, you may be able to file a claim against the broker. Far too often, these situations happen and it is the investor who is left wondering what to do after suffering a financial loss. It is also too common for broker’s to not fully explain the difference between discretionary and non-discretionary and investors may not know any better.

Should you find yourself in this situation and in need of legal representation to help recover your losses, Meyer Wilson is here to help. Our securities lawyers offer free case evaluations to discuss your situation and determine if you can file a claim. Reach out to us today and learn how we can help you.


Victim of Investment Misconduct?

Start with Free Evaluation of Your Claim 
  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please enter a message.