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Get Started in Shares by Glen Arnold

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Discretionary service

Under this type of service the broker is paid to manage the investor’s portfolio at the broker’s discretion. Thus the broker takes decisions on which shares to buy and sell without consulting the investor on each deal. The client is informed after the event.

Giving the broker authorisation to act before getting the investor’s approval allows the snatching of good opportunities as they arise in fast-moving markets. One of the common complaints from advisory brokers is that their clients are not always near a telephone – oddly enough, they like to live a life beyond their portfolio – and so fleeting chances are missed as permission to buy is not given quickly.

Furthermore, many clients simply do not want to spend time managing ...

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