Discretionary vs. Non-Discretionary Accounts

What this video covers

• The three factors that make a trade discretionary: asset, action, or amount chosen by the representative without the customer's prior approval for that specific trade
• Why deciding only price or timing of execution is NOT discretionary authority, and how the exam baits you with this distinction
• The written power of attorney requirement: why verbal or text approval is insufficient, and what happens if the document is not on file
• Heightened suitability obligations and principal review: why every discretionary trade must be approved by a principal
• What churning is, why discretionary accounts are monitored for it, and how excessive trading to generate commissions violates firm policy
• How to classify edge-case orders, such as "buy something in the tech sector" versus "buy 200 shares of Apple at the best price"