Choosing how to manage your wealth comes down to one crucial question: should you hand over the controls, or approve every single move?
This is the core of the discretionary portfolio management vs advisory debate.
Are you looking for a trusted pilot to fly your financial plane, or a skilled co-pilot to guide your decisions?
Discover which approach best suits your goals, time, and peace of mind in our definitive guide.
When you trust someone to manage your money, one of the first questions they’ll ask is: “Do you want us to manage your investments for you, or do you want to approve each move we make?” This is the fundamental choice between discretionary and advisory portfolio management.
Making the right decision is crucial, as it defines your relationship with your wealth manager and the level of control you retain over your financial future. In a discretionary setup, the professional makes buying and selling decisions on your behalf. In an advisory setup, they give advice, but you make the final call before anything happens.
Think of it this way: are you hiring a pilot to fly the plane for you, or a co-pilot to help you navigate? Both can work extremely well. The right choice depends on how hands-on you want to be, how quickly you want decisions made, and how much trust you have in your advisor.
This guide will walk you through everything you need to know to make a confident choice.
Think of it like a trusted pilot flying your financial plane. You tell them your destination, your goals, risk level, and restrictions, and they do the flying.
In a discretionary mandate, you grant your portfolio manager the authority to make investment decisions—buying, selling, and rebalancing—directly on your behalf without seeking prior approval for each transaction.
This relationship is built on a clear, legally binding agreement called an Investment Policy Statement (IPS).
This document outlines your financial objectives, risk tolerance, time horizon, and any specific constraints (e.g., ethical investing preferences).
The manager is legally obligated to operate strictly within these parameters, always acting as a fiduciary in your best interest.
Here, your advisor acts more like a co-pilot. They give you recommendations: “We should buy more bonds,” “Let’s reduce this stock,” “Let’s harvest losses for taxes”, but you approve every move.
Under an advisory (or non-discretionary) model, your wealth manager serves as an expert consultant.
They conduct the research and formulate a strategy, but the ultimate decision-making power remains with you.
Your adviser will contact you with specific proposals. They will explain the rationale behind each recommended trade and how it aligns with your overall financial plan. No action is taken until you provide explicit consent. It’s a team effort.
Here is a clear comparison of the day-to-day experience with each approach.
Feature | Discretionary | Advisory |
Who makes decisions | The manager | You |
How fast trades happen | Instantly | After your approval |
Behavioural benefits | High (you’re protected from emotional reactions) | Depends on your discipline |
Cost | Usually around 1% per year | Usually 0.3–1% per year |
Transparency | Full reporting, but fewer notifications per trade | Full visibility and full approval control |
Best for | Delegators, families, professionals | Learners, DIYers, committees |
Do You still Require Help With Your Choice?
Here’s what most people pay in 2025:
Type | Typical fee (as % of assets per year) | Example |
Traditional advisory firm | Around 1% of your portfolio | $5,000/year on a $500,000 account |
Hybrid/digital advisory | Around 0.30% | $1,500/year on $500,000 |
Discretionary separate account | Manager fee of 0.18–0.60%, plus advisory overlay | Often totals around 1%–1.3% |
So, while discretionary services sound “fancier,” the total cost isn’t that different from regular advisory setups.
The main question is what you get for that cost, and how decisions get made.
The slightly higher potential cost for discretionary management typically reflects the greater responsibility, risk management, and administrative work undertaken by the firm.
The best choice is deeply personal. Evaluate your own situation against these four factors.
You’re busy and want an expert to make day-to-day decisions.
You value speed, like rebalancing during market swings or taking quick tax-loss opportunities.
You trust your advisor and want them to “just handle it.”
You have a complex financial picture, multiple accounts, trusts, or family portfolios.
You tend to get nervous and make impulsive investment decisions.
You like being actively involved in each decision.
You’re still learning and want to understand every trade before it happens.
You’re managing money for an organization or family where multiple people must approve decisions.
You want to avoid surprises, no trades happen without your “yes.”
You’re comfortable handling market emotions yourself.
This chart simplifies the decision based on what you value most.
If you want… | Best option |
Hands-off investing | Discretionary |
To approve every trade | Advisory |
Faster action during volatility | Discretionary |
To learn as you go | Advisory |
To avoid emotional decisions | Discretionary |
Full control and oversight | Advisory |
Yes, absolutely.
In both discretionary and advisory relationships, a Registered Investment Adviser (RIA) has a fiduciary duty, which is a legal requirement to always act in your best interest.
Yes.
As your circumstances or comfort level change, you can typically work with your adviser to change the mandate on your account by signing new agreements.
Many clients start with an advisory relationship and move to discretionary as they build trust.
Advisory can be excellent for beginners who want to learn the ropes and understand the rationale behind each decision.
However, discretionary can also be ideal for beginners as it protects them from common emotional mistakes.
The choice depends on whether the beginner wants to learn by doing or by delegating.
Your firm will provide regular, detailed performance reports (usually quarterly) that show all transactions, holdings, and returns against relevant benchmarks.
You will also have regular meetings with your manager to review the strategy and progress towards your goals.
Yes.
The main types are advisory (non-discretionary) and discretionary.
Some firms also offer “execution-only” services, where they simply execute trades you tell them to make without providing any advice.
Both models, discretionary and advisory, can lead to great financial results. The choice is not about which is inherently “better” at picking investments, but which management style best fits your personality, schedule, and goals.
The real question is how you want to work with your advisor:
Either way, what matters most is a trusted process, clear communication, and staying invested through the ups and downs. Focusing on a disciplined, long-term plan is the true driver of wealth creation.
Ready to find the right approach for your financial future? Schedule a consultation with a PCC Wealth advisor today to build a strategy tailored to your life.
We’ve Moved Offices on 1st August 2025!
Private Client Consultancy is excited to announce that we have moved to a brand-new office space, designed to better serve our clients and reflect our continued growth.
Effective Date: Friday, 1st August 2025
New Address: Urb Jazmin De Miraflores, C. Jazmín, 2, Mijas Costa 29649, Malaga, Spain
Our phone numbers and email addresses remain unchanged.
All in-person meetings scheduled from 1st August onwards will take place at our new location. Please update your records accordingly.
We look forward to welcoming you to our new space!
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