What type of account is established when a customer gives trading authority to a registered representative?

When a customer grants trading authority to a registered representative, a discretionary account is established. In a discretionary account, the registered representative has the authority to make investment decisions on behalf of the customer without needing to obtain prior approval for each transaction. This level of authority allows the representative to act swiftly and management the account more effectively, particularly in rapidly changing market conditions.

This type of account is designed for clients who prefer to delegate their investment decisions to a professional while still maintaining a general oversight of the account's performance. The discretionary nature also implies that the registered representative must always act in the best interest of the client, adhering to fiduciary standards.

Other types of accounts, such as margin accounts, retirement accounts, and joint accounts, have different purposes and structures. A margin account allows clients to borrow funds from a broker to purchase securities, a retirement account is aimed at saving for retirement with certain tax advantages, and a joint account is shared between two or more individuals with all parties having equal rights to the account's assets. None of these account types inherently involve giving one party the discretionary trading authority like a discretionary account does.