Final answer:
Having discretionary authority over an account does not mean having custody. Discretionary authority refers to decision-making abilities, while custody relates to physically holding and safeguarding assets.
Step-by-step explanation:
Having discretionary authority over an account does not necessarily mean having custody. While discretionary authority refers to the ability to make decisions and take actions on behalf of an account, custody refers to physically holding and safeguarding the assets or property.
For example, a financial advisor may have discretionary authority over a client's investment account, allowing them to make investment decisions without seeking permission for each transaction. However, the custody of the assets may rest with a third-party custodian, such as a brokerage firm or bank.
Therefore, it is important to differentiate between discretionary authority and custody when discussing account management and responsibilities.