Mutual-Fund Advisory Program

AAA

DEFINITION of 'Mutual-Fund Advisory Program'

A portfolio of mutual funds that are selected to match a pre-set asset allocation model based on the investor's objectives and offered in a single investment account together with the services of a professional investment advisor. Typically, investors won't be charged separate transaction fees, but periodic (i.e. monthly/quarterly/yearly) asset-management fees based on the average value of assets held within the account. Also known as a "mutual fund wrap".

INVESTOPEDIA EXPLAINS 'Mutual-Fund Advisory Program'

Unlike managed accounts where the financial advisor has full discretion over any investment decisions, mutual-fund advisory programs allow the investor to work with the advisor in developing the optimal asset-allocation strategy. The advisor will help determine which model is best based on various factors such as the investor's goals, risk tolerance, time horizon and income, while providing ongoing guidance and investment support.

VIDEO

Loading the player...
RELATED TERMS
  1. Wrap Account

    An account in which a brokerage manages an investor's portfolio ...
  2. Risk Tolerance

    The degree of variability in investment returns that an individual ...
  3. Asset Management

    1. The management of a client's investments by a financial services ...
  4. Asset Allocation

    An investment strategy that aims to balance risk and reward by ...
  5. Investment Advisor

    As defined by the Investment Advisors Act of 1940, any person ...
  6. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
RELATED FAQS
  1. What is a wrap account and what are the advantages of using one?

    Wrap accounts, in which brokerage account costs are "wrapped" into a single or fixed fee, are great if you don't have time ... Read Full Answer >>
  2. How can I calculate the tracking error of an ETF or indexed mutual fund?

    Calculate the tracking error of an indexed exchange-trade fund (ETF) or mutual fund by doing a standard deviation percentage ... Read Full Answer >>
  3. How do you calculate the excess return of an ETF or indexed mutual fund?

    For exchange-traded funds (ETFs), the excess return should be equal to the risk-adjusted (or beta) measure that exceeds the ... Read Full Answer >>
  4. What mutual funds can be used for investing in the industrial sector?

    The industrial goods sector provides investors access to companies that engage in activities such as aerospace and defense, ... Read Full Answer >>
  5. How do I attract high net worth individuals (HNWI) as clients at my financial advisor ...

    While the majority of financial advisers provide wealth management and comprehensive financial planning to a wide range of ... Read Full Answer >>
  6. What is the difference between a custodian bank and a mutual fund custodian?

    Custodian banks and mutual fund custodians, commonly known as mutual fund corporations, perform very similar roles for different ... Read Full Answer >>
Related Articles
  1. Options & Futures

    Wrap It Up: The Terms And Benefits Of Managed Money

    Find out if fee-based investing is right for you, by learning its terminology and types of investment vehicles.
  2. Mutual Funds & ETFs

    That's A (Mutual Fund) Wrap!

    These advisory programs offer professional supervision and other handy tools for building a diversified portfolio.
  3. Mutual Funds & ETFs

    Mutual Funds or ETFs: Which is Better?

    Trying to decide between a mutual fund or ETF? Here's what you need to know.
  4. Investing Basics

    Understanding Open-End Funds

    An open-end fund is a type of mutual fund that does not limit the amount of shares it issues, but issues as many shares as investors are willing to buy.
  5. Mutual Funds & ETFs

    Why You May Want To Be (And Stay) In Bonds

    Bonds are complicated, and it’s easy to feel intimidated or confused. Fortunately, you don’t need to be a numbers geek to be an informed investor.
  6. Professionals

    5 Signs That You Have a Lousy 401(k) Plan

    Knowing whether a 401(k) plan is good or not so good is important. This will help participants decide how much to invest and when to demand improvements.
  7. Economics

    The 10 Best Cities for Financial Advisors

    If you're an advisor looking for a promising location to practice, consider the combination of high wealth and low market penetration of these locales.
  8. Economics

    The Worst Cities for Financial Advisors

    Financial advisors may want to avoid low income areas or those with lofty wealth but high numbers of advisors.
  9. Mutual Funds & ETFs

    Why Hedge Fund Managers Make Good Advisory Clients

    Super-busy hedge fund managers should be viewed as an opportunity for sophisticated financial advisors who can step in and offer their services.
  10. Professionals

    A Look at How the Ultra-Wealthy Invest

    Ultra-wealthy investors are cautious this year as they approach the markets. Many target mutual funds and stocks, but most also diversify their portfolios.

You May Also Like

Hot Definitions
  1. Mixed Economic System

    An economic system that features characteristics of both capitalism and socialism.
  2. Net Worth

    The amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure ...
  3. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  4. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  5. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center