Choosing the right investment approach is crucial in wealth management in Switzerland. Some investors want complete control, while others prefer to delegate to experts. But which style fits you best – a discretionary mandate or an advisory mandate? Let’s explore the differences and see which investor profile benefits most.
What is Discretionary Investment Management?
Under a discretionary mandate, investment decisions are delegated to your wealth manager. You define goals and risk tolerance, and professionals execute the strategy. They monitor markets, adjust portfolios, and react quickly to volatility. This frees clients—especially busy HNWI and UHNWI—from daily investment tasks while ensuring their long-term objectives remain on track.
Pros of Discretionary Investment
✔ No effort required – Experts manage all investment decisions.
✔ Fast market reaction – Immediate adjustments without waiting.
✔ Professional risk management – Portfolio aligned with your profile.
Cons of Discretionary Investment
✘ Higher fees – Active management usually costs more.
✘ Less control – You hand over decision-making authority to professionals.
What is Advisory Investment Management?
An advisory mandate keeps you in control. Wealth managers provide research, strategy, and recommendations, but you approve every transaction. This suits investors who enjoy involvement and prefer full oversight. It combines expert guidance with personal decision-making authority.
Pros of Advisory Investment
✔ You stay in control – No trades without your approval.
✔ Lower fees – Costs are usually lower than discretionary.
✔ Expert insights – Access to research before investing.
Cons of Advisory Investment
✘ Time-consuming – You must review and approve all trades.
✘ Slower reactions – Delays possible in fast-moving markets.
Discretionary vs Advisory: Key Differences
| Feature | Discretionary Management | Advisory Management |
| Decision Making | Wealth manager decides | You decide |
| Time Commitment | Minimal | High |
| Fees | Higher | Lower |
| Control | Low | High |
| Market Responsiveness | Fast | Slower |
Which Investor Profile Suits Each Approach?
The choice between discretionary and advisory depends on your profile. Busy professionals or entrepreneurs often choose discretionary management to save time. By contrast, hands-on investors and cost-conscious clients prefer advisory mandates for lower fees and control. Many HNWI and UHNWI combine both: a discretionary mandate for the core portfolio, and advisory for specialised investments.
For a broader overview of the main differences between discretionary and advisory mandates, see our clear comparison guide.
Which Investment Suits You? Take the Quiz!
Want to know which approach is right for you? Try our investor type quiz. Answer a few quick questions and get personalised recommendations that match your needs.
Discretionary vs Advisory Investment
Final Thoughts
Both discretionary and advisory investment models have strengths. A discretionary mandate offers convenience and quick execution, while an advisory mandate delivers flexibility and lower costs. The right choice depends on your time, experience, and preferences. A transparent wealth manager in Switzerland can help you combine both models to build a balanced, long-term strategy.
