What does investment discretion include?

• A. Deciding which securities to buy or sell and the number of shares
• B. Timing and price only
• C. Only the type of security
• D. Only the amount to invest

Answer: (A)

Investment discretion means the advisor has authority to implement the client’s plan by choosing which securities to buy or sell and how large each position will be. In other words, the key decisions are what to include in the portfolio and how many shares to hold or trade. This allows the advisor to act without getting prior approval for every transaction, as long as they follow the client’s guidelines and fiduciary duties. Timing and execution price are important, but they are operational factors of how orders are carried out rather than the essence of discretionary authority. The options that limit discretion to timing/price, to only the type of security, or to only the amount miss the full scope of what discretionary authority covers.