Discretionary management
An arrangement in which a manager, not the account holder, decides on trades within an agreed strategy.
How to read the number
The single difference from brokerage service is who takes the decision to trade. Here it is the manager, and the fee is earned for that decision-making itself.
When the metric lies
The management fee is charged whatever the outcome, and a strategy's past record is a description of history rather than an obligation about the future.
Also known as: discretionary mandate