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Discretionary account
discretionary account is a brokerage account in which the broker is allowed to buy or sell stocks on the investors name. If you have this type of account you are allowing the brokerage firm decide what type of stocks to buy or sell as well as what amounts and prices must you pay or receive for these (for a not so ethical broker a discretionary account is the answer to his prayers). One should monitor your discretionary account activities monthly to determine if your broker is exceeding himself in negotiations to get more commissions.
In this process called churning stocks are frequently circulating although market prices stay the same. Unless you know and trust your broker beware with the discretionary account.
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