What is a 'Wrap Fee'

A wrap fee is a comprehensive charge levied by an investment manager or investment advisor to a client for providing a bundle of services, such as investment advice, investment research and brokerage services. Wrap fees allow an investment advisor to charge one straightforward fee to their clients, simplifying the process for both the advisor and the customer.

BREAKING DOWN 'Wrap Fee'

Wrap fees are generally set up to be a percentage of the assets under management. The wrap fee is intended to provide payment for all the direct services the customer receives, as well as cover the administrative costs incurred by the investment firm.

RELATED TERMS
  1. Wrap Account

    An account in which a brokerage manages an investor's portfolio ...
  2. Mutual Fund Wrap

    Also known as a mutual fund advisory program or a wrap account, ...
  3. Investment Advisor

    As defined by the Investment Advisors Act of 1940, any person ...
  4. ETF Wrap

    A type of special investment portfolio in which an investor, ...
  5. Advisor Account

    A type of investment account where an investment advisor works ...
  6. Layered Fees

    Two sets of management fees that are paid by an investor for ...
Related Articles
  1. Investing

    Wrap It Up: Terms And Benefits Of Managed Money

    Find out if you should have your money managed by professionals.
  2. Retirement

    The Rap On Wrap Fees For Retirement Accounts

    If your retirement account is managed under a wrap fee program, you need to consider whether you should pay the fee out of your retirement account balance or out-of-pocket.
  3. Investing

    Uncovering The ETF Wrap

    Tax benefits, low expense ratios and flexibility - discover the advantages of this managed money product.
  4. Financial Advisor

    Advisors Fees: What Are You Paying For?

    Fees or commissions? Which is best? Either way, what matters most is that the investor is aware of each charge and how if impacts their portfolio.
  5. Financial Advisor

    4 Tips on Being Upfront About Fees with Clients

    Advisors should be proactive in discussing fees so clients know what they are paying. Here are some pointers in how to start the conversation.
  6. Financial Advisor

    Management Fees: How Advisors Can Protect Them

    With management fees falling, advisors are wondering what they can do about it. Here are a few tips.
  7. Financial Advisor

    Are Financial Advisor Fees Too High?

    Fees charged by financial advisors run the gamut. Are you getting a fair deal or paying too much?
  8. Financial Advisor

    Are AUM Fees a Thing of the Past?

    Although the assets under management fee seemed like a good idea for a long time, current market trends may be making it a thing of the past.
  9. Financial Advisor

    Advisors: How and Why to Justify Your Fees

    In an era of fee compression here's how financial advisors can justify what they charge clients.
  10. Investing

    Advisory Fees On The Series 66 Exam

    Learn what you need to know about investment advisory fees and contracts to pass the Series 66 exam.
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 Answer >>
Hot Definitions
  1. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center