Discretionary Accounts in Australia: 2026 Guide

A discretionary account is an investment account where you give a financial professional the authority to make buy and sell decisions without seeking your approval for each transaction. The adviser or manager operates within a set of agreed guidelines—known as a mandate—which you help establish at the outset. This mandate typically covers your risk tolerance, preferred asset classes, ethical considerations, and any specific restrictions.

Key features of discretionary accounts:

• Mandate-driven: You set the broad parameters, and the adviser manages the portfolio within those boundaries.
• Timely execution: The manager can act quickly on market opportunities without waiting for your sign-off.
• Professional oversight: Your investments are actively monitored and adjusted as market conditions change.

Discretionary accounts are commonly offered through managed account services, private wealth management, and increasingly via retail investment platforms in Australia.

Several factors are contributing to the growing popularity of discretionary accounts among Australian investors in 2026:

• Regulatory clarity: Recent financial advice reforms have clarified the responsibilities of advisers managing discretionary accounts, leading to greater transparency and consumer protection.
• Market volatility: Ongoing global uncertainty and shifting interest rates have prompted many investors to seek professional management that can respond quickly to market changes.
• Time constraints: With busy work and personal lives, many Australians prefer to delegate day-to-day investment decisions to experts.
• Technology: Modern digital platforms allow investors to monitor their discretionary accounts in real time, even if they’re not making the decisions themselves.

Discretionary management is now accessible to a wider range of investors, not just those with large portfolios, as more platforms offer flexible account sizes and entry points.

Discretionary accounts are not suitable for everyone. Here’s how to determine if this approach matches your needs:

Who Might Benefit

• Busy professionals: Those who lack the time or desire to manage investments daily.
• Investors seeking expertise: Individuals who want their portfolios managed by professionals with market experience.
• Delegators: People comfortable with handing over day-to-day control within clear guidelines.
• Medium to large portfolio holders: While traditionally aimed at those with substantial assets, options for smaller portfolios are becoming more common.

Who Might Not Benefit

• DIY investors: Those who enjoy selecting their own investments and making frequent changes.
• Hands-on controllers: Anyone uncomfortable with delegating investment decisions.
• Investors with highly specific or frequently changing instructions: Discretionary accounts work best with stable, well-defined mandates.

Before opening a discretionary account, you’ll typically have a detailed conversation with your adviser about your objectives, risk profile, and any restrictions (such as ethical exclusions or sector preferences). You’ll receive regular reports and can review or adjust your mandate as your circumstances change.

Discretionary accounts generally charge a management fee, which may be a flat rate or a percentage of assets under management. Some providers may also charge performance-based fees. In 2026, fee transparency is a key focus, with regulations requiring clear disclosure of all costs and any potential conflicts of interest.

Key Risks to Consider

• Manager performance: Your investment outcomes depend on the skill and integrity of your adviser. It’s important to check their credentials and regulatory standing.
• Communication: Even with a discretionary mandate, you should expect regular updates and the ability to review or amend your instructions.
• Market risk: All investments carry the risk of loss, and discretionary management cannot eliminate exposure to market downturns.

The current regulatory environment provides clients with more rights, including access to detailed performance reporting and the ability to revoke discretionary authority at any time.

When you open a discretionary account, you and your adviser agree on a mandate that outlines your investment goals, risk tolerance, and any specific preferences or restrictions. The adviser then manages your portfolio within these boundaries, making decisions about buying and selling assets as market conditions change.

For example, an investor might set a mandate for a balanced portfolio with a certain percentage in growth assets (like shares) and defensive assets (like bonds and cash), and request that ethical considerations be taken into account. The adviser would then make all investment decisions within these limits, rebalancing the portfolio as needed and responding to market events without needing to consult the investor for each trade. Regular performance reports are provided, and the investor can meet with the adviser periodically to review goals and make adjustments if necessary.

The process typically involves:

1. Initial consultation: Discuss your financial goals, risk appetite, investment preferences, and any restrictions.
2. Mandate agreement: Set the parameters for how your portfolio will be managed.
3. Account setup: Complete the necessary paperwork and authorisations.
4. Ongoing management: The adviser manages your investments within the agreed mandate, providing regular updates and performance reports.
5. Review and adjustment: You can review your account and adjust your mandate as your circumstances or goals change.

Advantages

• Professional management: Access to expertise and market insights.
• Time-saving: No need to monitor markets or make frequent decisions.
• Responsive to market changes: Advisers can act quickly on your behalf.
• Customisation: Portfolios are tailored to your goals and preferences.

Disadvantages

• Less direct control: You won’t approve every transaction.
• Costs: Management and performance fees can impact returns.
• Reliance on adviser: Outcomes depend on the adviser’s skill and judgement.

What is the main benefit of a discretionary account?
The main benefit is professional management, allowing you to delegate investment decisions to an expert who acts within your agreed guidelines.

Can I change my investment mandate after opening a discretionary account?
Yes, you can review and adjust your mandate as your goals or circumstances change.

Are discretionary accounts only for wealthy investors?
While traditionally aimed at larger portfolios, more options are now available for investors with smaller amounts.

Do I still receive updates on my portfolio?
Yes, regular performance reports and updates are standard, so you remain informed about your investments.

Discretionary accounts offer a streamlined way for Australians to access professional investment management without the need for daily involvement. With increased transparency, regulatory protections, and digital access in 2026, this approach is more accessible than ever. If you value expert oversight and want to free up your time while keeping your investments aligned with your goals, a discretionary account could be a practical solution.