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managed discretionary account (MDA)

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A personal investment account where you own investment assets, such as company shares or units in a managed fund. You give someone else (the MDA provider) the authority to buy and sell investments on your behalf. Financial advisers often use MDAs to manage portfolios for their clients.

How an MDA works

You sign an agreement (MDA contract) with the MDA provider. This gives the provider the discretion to buy or sell investments without having to check with you.

You and the provider agree on an investment program, and they must make investment decisions in line with this.

The investment program sets out what the MDA provider can invest in, and what trading strategies to use. This reflects the investment strategy in the Statement of Advice (SOA) given to you by your financial adviser. Your financial adviser may also be your MDA provider.

The provider must review the investment program at least every 13 months. This is to make sure it continues to be suitable for you.

An MDA may be hosted on an online investment platform. The MDA provider uses the platform to buy and sell assets on your behalf. It also has tax and reporting services.

You can log in at any time to see how your investments are performing.

It's important to compare the benefits to the costs and risks before you invest in an MDA.

Benefits of an MDA

MDAs can be useful for investors who don't have the time or expertise to manage their own investments. They may not be suitable for all investors.

Benefits of an MDA include:

Risks of an MDA

Risks of using an MDA include:

If you're uncomfortable with these risks, or want to be in control of your investment decisions, an MDA may not be right for you.

Costs of an MDA

Check the fees and costs before you invest, as these reduce your investment returns. You can see a list of fees in the Financial Services Guide (FSG) and the Statement of Advice.

Fees may include: