Discretionary vs. advisory mandates: Which model suits you?

You want your assets managed professionally, but face a key question: discretionary or advisory mandate? Both models have their merits, yet which fits your life situation, your available time, and your investment goals? This article walks you through the differences, the trade-offs, and helps you make the right decision.

Key points at a glance

• Discretionary Mandate: The wealth manager makes investment decisions independently. You retain strategic control and save time.

• Advisory Mandate: You make all decisions yourself; the adviser provides recommendations. Full control, but greater time commitment.

• Time factor: Advisory requires active involvement and availability; discretionary saves time in day-to-day life.

• Costs: The two models differ in their fee structure; transparency is what matters.

• Everon advantage: FINMA-regulated, digital solutions for transparency, tailored strategies for both mandate types, suitable for Wealth Managers and end clients alike.

What is a Discretionary Mandate?

With a discretionary mandate (also known as a wealth management mandate), you delegate the management of your portfolio to a professional wealth manager. The manager makes investment decisions independently, within the parameters agreed at the outset. Together you set your investment strategy, define your risk profile, and establish limits. From that point, the wealth manager takes over the operational management.

In practice this means: the manager decides on purchases and sales, carries out rebalancing, and adjusts the portfolio to market changes without seeking your approval each time. You retain strategic control without having to attend to day-to-day activity.

Transparency is maintained throughout: you receive regular reports and can check your portfolio status at any time via a digital solution or app.

A discretionary mandate is particularly well suited to investors who have little spare time, carry a demanding workload, or travel frequently. It is the right choice if you value the expertise of a professional wealth manager and are prepared to delegate operational decisions.

Advantages: Discretionary Mandate

A discretionary mandate offers several advantages:

• Time saving: You do not need to be constantly available or attend to operational decisions. Management runs in the background.

• Professional management: Experienced wealth managers make decisions based on thorough analysis and market assessment.

• Swift response: When markets move, your portfolio can be adjusted promptly, without delays caused by approval rounds.

• Suitable for: Busy professionals, those working internationally, and anyone with limited time or interest in operational management.

The discretionary mandate is particularly appropriate when you value professional expertise and are prepared to trust a wealth manager.

Disadvantages: Discretionary Mandate

There are also aspects worth considering:

• Less direct control: Decisions are not discussed with you in advance. You learn of transactions after they have been carried out.

• Costs: A discretionary mandate is generally more expensive than an advisory mandate, as the management workload is higher.

• Trust required: You need to be confident that the wealth manager acts in your interest. This makes choosing a FINMA-regulated provider essential.

• Tax considerations: More frequent transactions can have tax consequences, for instance regarding capital gains. Discuss this in advance with your tax adviser.

These drawbacks diminish when you choose a trustworthy partner who acts transparently and reports regularly.

What is an Advisory Mandate?

With an advisory mandate, you retain full decision-making authority. Your adviser analyses your portfolio, monitors markets, and provides well-founded recommendations, yet the final decision always rests with you. Every transaction requires your express approval.

The process works as follows: your adviser develops proposals for purchases, sales, or reallocations. These are discussed with you, the rationale is explained, and your agreement is sought. Only then is the transaction executed. For you, this means full control, but also greater responsibility and time commitment.

The advisory mandate is ideal for investors who want to be actively involved in managing their assets, who have financial knowledge, and who have the time to engage with their portfolio on a regular basis.

Advantages: Advisory Mandate

The advisory mandate has different strengths:

• Full control: You decide on every transaction. No surprises, no decisions taken without your knowledge.

• Learning effect: You gain direct insight into investment decisions and can build your financial knowledge continuously.

• Lower costs: An advisory mandate is often less expensive, as the adviser takes on fewer operational tasks.

• Tax control: You can factor in tax considerations directly, for example to manage capital gains.

• Suitable for: Investors with financial knowledge, time, and an interest in active involvement.

The Advisory Mandate is the right choice if you want to remain closely involved and have the time to engage with your portfolio regularly.

Disadvantages: Advisory Mandate

Challenges exist here too:

• Time-consuming: Regular coordination requires time and attention. You must be reachable and ready to make decisions.

• Slower execution: Because every transaction requires your approval, decisions can be delayed. In fast-moving markets, this can be a disadvantage.

• Emotional decisions: Without a systematic approach, there is a risk of being influenced by behavioural biases, such as fear or greed.

• Availability: If you travel frequently or are difficult to reach, communication can become problematic.

Whoever chooses an advisory mandate should be prepared to invest active time and make decisions with discipline.

Decision guide: Which mandate suits you?

To reach a decision, consider the following questions:

1. How much time can you commit?

If you carry a demanding workload or have little time for financial matters, a Discretionary Mandate is the better choice. If you have sufficient time and interest, there is no reason against an Advisory Mandate.

2. How strong is your financial knowledge?

Do you have a solid grounding in asset classes, markets, and strategies? Then you can contribute actively with an Advisory Mandate. If that knowledge or interest is absent, a Discretionary Mandate makes more sense.

3. How important is direct control to you?

Those who want to make every decision themselves choose Advisory. Those prepared to delegate decisions benefit from Discretionary.

4. How available are you?

Do you travel frequently, work across time zones, or are you difficult to reach? Then a Discretionary Mandate is more practical. With good availability, Advisory works well too.

5. What tax considerations apply?

If you want to actively manage capital gains, Advisory gives you more control. With Discretionary, you should clarify the tax implications of more frequent transactions in advance.

Discretionary vs. Advisory: the key differences

Criterion	Discretionary Mandate	Advisory Mandate
Decision authority	Wealth manager	Client
Time commitment	Low	High
Response time	Fast (immediate execution)	Slower (approval required)
Communication	Regular reports	Ongoing coordination needed
Suited to	Limited time, delegation preferred	Active involvement preferred
Costs	Generally higher	Generally lower

Costs and fees

Costs differ considerably between the two mandate types.

Discretionary Mandate: Fees are generally higher here, as the wealth manager takes over operational management. Typical costs:

• Management fee: Annual charge of between 0.5 and 1.5 per cent of assets under management

• Performance fee: Success-related charge (not always levied)

• Transaction costs: Often included in the management fee

Advisory Mandate: Fees tend to be lower here, as less administrative work is involved:

• Advisory fee: Either an hourly rate or a flat fee

• Transaction costs: Often shown separately

Regulatory aspects in Switzerland

FINMA (the Swiss Financial Market Supervisory Authority) regulates wealth managers in Switzerland strictly. This protects investors and establishes clear lines of responsibility.

Differences in investor responsibility:

• Discretionary Mandate: The wealth manager bears responsibility for operational decisions, within the agreed framework. You as the client define the strategy; the manager implements it.

• Advisory Mandate: You as the client bear ultimate responsibility. The adviser provides recommendations, but the decision rests with you.

Documentation requirements: Both mandate types are subject to strict documentation requirements. All decisions, transactions, and communications must be traceable.

Can I switch between mandates?

Yes, switching between a Discretionary and an Advisory Mandate is possible in principle. Reasons for a switch might include:

• Change in life circumstances: More or less time becomes available.

• New financial knowledge: You have engaged closely with financial markets and now wish to take a more active role.

• Shifting preferences: Your attitude to control and delegation has changed.

The process: Speak with your adviser or wealth manager. Together you will adjust the mandate agreement. It is important to consider the decision carefully rather than acting on impulse. A conversation with your adviser helps you make the right choice.

Everon: technology meets Swiss tradition

Everon brings together Swiss financial tradition and modern technology, offering tailored solutions for both mandate types.

For end clients:

• App for portfolio monitoring: Maintain a clear overview at any time, whether you hold a Discretionary or Advisory Mandate.

• Risk profiling: Find the investment strategy that fits your goals and risk tolerance.

• Transparent reporting: All transactions, fees, and performance data are available to view at any time.

For Wealth Managers (B2B):

• Client onboarding solution: An efficient process with well-organised document management.

• Performance tracking: Monitor your clients’ portfolios effectively.

• Co-branding option: Present the Everon app with your own logo for a consistent brand experience.

• Training and support: Everon supports Wealth Managers with training, marketing materials, and ongoing assistance.

Everon Portfolio Engine: At the heart of Everon is the proprietary Portfolio Engine. It is built on a systematic, quantitative approach and avoids emotional errors (behavioural biases). Multi-factor strategies ensure that your portfolio is broadly diversified and grounded in evidence.

Security is a priority: Everon is FINMA-regulated, works with established Swiss custodian banks, and stores all data on certified servers in Switzerland.

Contact Everon to schedule a conversation, or explore partnership opportunities for advisers at everon.swiss/partnership.

Conclusion: making the right choice

Discretionary and advisory mandates both have their place. The decision depends on your personal circumstances: how much time do you have? How strong is your financial knowledge? How important is direct control to you? How available are you? What tax considerations are relevant?

What matters is that you can trust a provider who operates transparently, is regulated, and applies modern technology.