When you entrust your savings to a financial intermediary, you have two main options: managing your investments yourself (self-directed management) or delegating this responsibility to professionals (discretionary portfolio management). These two management methods cater to different investor profiles, each with its own advantages and limitations. Here's everything you need to know to make the right choice.
1. Self-management: you are in control
Definition
In self-directed investing (also called standard securities account management or direct management), the investor makes all the decisions themselves: choosing which securities to buy or sell, timing of trades, and asset allocation. The broker provides a trading platform, analytical tools, and information, but does not intervene in your investment decisions.
Its strengths
- Total freedom of decision: you invest according to your own analysis, convictions and strategy.
- Immediate responsiveness: you can place orders in real time, taking advantage of market opportunities as soon as they arise.
- Potentially reduced costs: you only pay brokerage fees on each transaction, with no annual management fees.
- Total transparency: you know at all times what you own and why.
- Continuous learning: managing your own portfolio is a source of intellectual and financial enrichment.
His requirements
- Availability and involvement: monitoring markets requires time and regular attention.
- Financial skills: a good knowledge of markets, financial products and stock market mechanisms is essential.
- Mastering emotions: knowing how to resist panic during market downturns or euphoria during upturns.
- Discipline in adhering to one's investment strategy.
2. Discretionary portfolio management: experts at your service
Definition
With discretionary portfolio management (or delegated management), you entrust the management of your portfolio to a team of professionals—portfolio managers, financial analysts—by giving them a written mandate that defines your objectives, investment horizon, and risk tolerance. The managers then make investment decisions on your behalf, within the framework you have established.
Its strengths
- Professional expertise: experienced managers, equipped with advanced analytical tools, manage your portfolio on a daily basis.
- Save time: you completely delegate monitoring and investment decisions.
- Emotional management: professionals make rational decisions, free from behavioral biases.
- Optimized diversification: managers build balanced portfolios according to market conditions.
- Regular reporting: you receive detailed reports on performance and operations carried out.
- Personalization: the mandate is tailored to your risk profile, your values (SRI, sector exclusion) and your wealth management needs.
Its limits
- Management fees: annual fees are added to transaction fees.
- Loss of direct control: you no longer intervene in day-to-day operations.
- Entry threshold: some mandates require a minimum level of assets.
3. Summary comparative table
| Criteria | Self-management | Management under mandate |
| Investment decisions | Taken by the investor | Taken by professional managers |
| Time required | Important (regular monitoring) | Minimal (total delegation) |
| Required level of expertise | Pupil | Low (managed by professionals) |
| Costs | Brokerage fees only | Management fees + brokerage fees |
| Customization | Total freedom | Customized according to the mandate |
| Transparency | Total in real time | Via periodic reporting |
| Suitable profile | Active, experienced investor | Passive or busy investor |
4. How to choose?
The choice between self-directed and managed accounts depends primarily on your personal profile. Ask yourself the right questions:
- Do you have time to follow the markets daily?
- Do you possess the necessary financial skills to analyze businesses and macroeconomic trends?
- Are you comfortable with managing the stress inherent in market fluctuations?
- What is your priority objective: to optimize your personal performance or to preserve and grow your wealth over the long term?
If you answer "yes" to most of these questions, self-directed investing may be right for you. Otherwise, discretionary portfolio management will offer you valuable peace of mind while entrusting your savings to experts.
Our support
As a brokerage firm, we are here to support you, whatever option you choose. Our advisors can help you define your investor profile, understand the different options available, and implement the solution best suited to your financial situation.
Feel free to contact us for a personalized and no-obligation consultation.
