What distinguishes a managed account from a standard account?

• A. The client has full control over all decisions
• B. Investment decisions are made consistently by the dealer member or a third party
• C. It is solely for retirement savings
• D. There are no fees associated with transactions

Answer: (B)

The distinction between a managed account and a standard account is primarily centered around the level of control and the nature of the investment decisions made. In a managed account, the investment decisions are typically handled by the dealer member or a third party who has the expertise to manage investments on behalf of the client. This arrangement allows for a more strategic approach, as the manager can make informed decisions based on market conditions and investment goals.

In contrast, a standard account usually implies that the client retains full control over all investment decisions. This means that the client is responsible for researching, selecting, and managing their own investments without professional intervention.

Additionally, the other options present misconceptions about managed accounts. They are not exclusively meant for retirement savings, as they can be utilized for various investment objectives. Furthermore, while there may be fees associated with managed accounts due to the advisory services provided, standard accounts can also incur transaction fees. Thus, the essence of a managed account lies in the reliance on professional management for investment decisions, which signifies its primary distinction from a standard account.