Discretionary vs Advisory Mandate: Key Differences

Choosing the right investment approach is one of the most important decisions in wealth management in Switzerland. Some investors want full control over every trade, others prefer to delegate to experts. So which model fits you — a discretionary mandate or an advisory mandate? Below we compare both in detail, including how they work in the Swiss context, what they cost, and which investor profile benefits most.

What is a Discretionary Mandate?

Under a discretionary mandate, you delegate investment decisions to your wealth manager. You define the goals, the investment strategy and your risk tolerance in an investment policy statement, and the professionals execute it on your behalf. They monitor markets daily, rebalance the portfolio and react to volatility without needing your sign-off for each transaction. This frees clients — especially busy HNWIs and UHNWIs — from day-to-day investment tasks while keeping their long-term objectives on track.

Pros of a Discretionary Mandate

• No effort required – experts handle all investment decisions within your agreed framework.
• Fast market reaction – the manager can act immediately, with no approval delays.
• Professional, disciplined risk management – the portfolio stays aligned with your profile.

Cons of a Discretionary Mandate

• Higher fees – active, hands-on management typically costs more.
• Less direct control – you hand over day-to-day decision-making authority.

What is an Advisory Mandate?

An advisory mandate keeps you in control. Your wealth manager provides research, strategy and concrete recommendations, but you approve every transaction before it is executed. This suits investors who enjoy being involved and want full oversight of their portfolio. It combines expert guidance with personal decision-making authority — but it also means the responsibility for acting (or not acting) ultimately rests with you.

Pros of an Advisory Mandate

• You stay in control – no trade happens without your approval.
• Lower fees – costs are typically lower than those of a discretionary mandate.
• Expert insights – you get professional research and ideas before you invest.

Cons of an Advisory Mandate

• Time-consuming – you must review and approve every recommendation.
• Slower reactions – in fast-moving markets, waiting for approval can cost opportunities.

Discretionary vs Advisory mandate: Key Differences at a Glance

What Do Discretionary and Advisory Mandates Cost?

Fees are often the deciding factor, so it helps to understand how they are structured. A discretionary mandate usually carries a single, all-in management fee charged as a percentage of assets under management — in Switzerland this commonly falls in the region of 0.8%–1.5% per year, depending on portfolio size and complexity. An advisory mandate typically has a lower base advisory fee, but each transaction you approve may incur separate costs, so an active advisory portfolio can end up closer to a discretionary one in total. The key difference is predictability: discretionary fees are largely fixed and transparent, while advisory costs depend on how often you trade. For the exact figures that apply to your situation, see our pricing overview.

How Are These Mandates Regulated in Switzerland?

In Switzerland, both discretionary and advisory mandates are governed by the Financial Services Act (FinSA) and supervised by the Swiss Financial Market Supervisory Authority, FINMA. Independent wealth managers must hold a licence and meet suitability and transparency requirements before advising clients. This regulatory framework protects investors regardless of which mandate they choose — but it also means a discretionary manager carries a formal duty to act within your agreed risk profile, while in an advisory relationship the final responsibility for each decision remains with you. Choosing an independent, FINMA-supervised wealth manager gives you an adviser whose incentives are aligned with yours rather than with a bank’s product shelf.

Which Investor Profile Suits Each Approach?

The right choice depends on your time, temperament and involvement. A few typical profiles:

• The busy entrepreneur or executive who has little time and wants a professionally managed portfolio usually chooses a discretionary mandate.
• The hands-on, cost-conscious investor who enjoys following markets and wants to approve every move tends to prefer an advisory mandate.
• Many HNWIs and UHNWIs combine both — a discretionary mandate for the core portfolio, and advisory services for specific or specialised investments where they want a say.

For a deeper side-by-side breakdown, see our detailed comparison guide, and learn more about why a personal wealth manager can be the better choice.

Which Investment Style Suits You? Take the Quiz

Not sure which approach is right for you? Try our investor type quiz. Answer a few quick questions and receive personalised recommendations tailored to your goals and risk profile.