Ambassador Discretionary Client Agreement

April 8, 2021

With Discretion, the company is not obligated to provide the customer`s consent or authorization for each transaction on the account. This is considered to be one of the main advantages of discretion. However, if the relationship or account is not discretionary, the advisor must obtain the client`s permission before executing the transaction. The client`s permission documentation process is a two-part process. However, for some investors, discretionary accounts are not appropriate. These investors prefer a more practical approach with their investment accounts and are willing to participate in the decision-making process. Others have such complicated constraints on their accounts that limit the possibility of the account being discretionary. Most brokers trade for a variety of clients. From time to time, the broker realizes a certain possibility of buying or selling that is advantageous to all his clients. If the broker has to contact customers successively before running the trade, the business activity for the first customers could affect the prices for customers at the end of the list.

With discretionary accounts, the broker can make a large block trade for all customers, so that all his clients get the same prices. A new type of discretionary account comes from robotic consultants – automated investment management services, carried out by algorithms with minimal human intervention. Robotic advisors generally follow passive indexed strategies that follow modern portfolio theory (MPT), but can also be used with user-imposed restrictions, such.B as to invest socially responsibly or to pursue a specific investment strategy of their choice. Unlike traditional managed accounts, robo-advised accounts require very low minimum account balances (for example. B 5 or even 1 USD) and charge very low fees (0.25 per cent per annum, or no fees). On a paid account, clients pay a quarterly fee, based on the amount of assets in the account, for the services of a financial advisor as part of a consulting relationship. When deciding to pay fees instead of commissions, customers should understand that fees may be higher than a commission alternative in a lower trading period.

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