The primary difference between discretionary and non-discretionary accounts is the level of authority your broker has over each. For discretionary accounts, also called managed accounts, your broker has the freedom to make trades without contacting you first. However, this does not mean that the broker has freedom to do whatever they want; investors may still place limits or give instructions regarding the kinds of trades the broker is allowed to make. For non-discretionary accounts, on the other hand, your broker must contact you before conducting any trade. Non-discretionary accounts are better for investors who want to take a more active role in their investments. Non-discretionary brokers still make investment recommendations, but they cannot act on those recommendations before obtaining consent to do so from the investor. Keep in mind that regardless of the type of account you have, your broker is duty bound to make trades in your best interest. Brokers and financial advisers are required to make trades that are suitable for your goals and risk tolerances. A broker’s failure to do so exposes them to potential liability for unauthorized trading or breach of fiduciary duty. Knowing the status of your account helps an investment fraud lawyer determine what claims you may have.