Wrap Fee

AAA

DEFINITION of 'Wrap Fee'

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.

INVESTOPEDIA EXPLAINS '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. Mutual Fund Wrap

    Also known as a mutual fund advisory program or a wrap account, ...
  2. ETF Wrap

    A type of special investment portfolio in which an investor, ...
  3. Wrap Account

    An account in which a brokerage manages an investor's portfolio ...
  4. Fund Of Funds

    A mutual fund that invests in other mutual funds. This method ...
  5. Commission

    A service charge assessed by a broker or investment advisor in ...
  6. Broker

    1. An individual or firm that charges a fee or commission for ...
RELATED FAQS
  1. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  2. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  3. What percentage of a diversified portfolio should large cap stocks comprise?

    The percentage of a diversified investment portfolio that should consist of large-cap stocks depends on an individual investor's ... Read Full Answer >>
  4. Why should an investor include an allocation to the telecommunications sector in ...

    An investor should include an allocation to the telecommunications sector in his portfolio, because telecom offers an investor ... Read Full Answer >>
  5. What are some mutual funds that do not have 12b-1 fees?

    Some of the most popular and best-performing mutual funds that do not include any 12b-1 fees in the expenses charged to fund ... Read Full Answer >>
  6. What action is the SEC likely to take on 12b-1 fees?

    The Securities and Exchange Commission (SEC) may take action to impose greater regulation on how 12b-1 fees are used, or ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Paying Your Investment Advisor - Fees Or Commissions?

    The way a professional is compensated can affect quality of service. Learn more here.
  2. 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.
  3. Mutual Funds & ETFs

    That's A (Mutual Fund) Wrap!

    These advisory programs offer professional supervision and other handy tools for building a diversified portfolio.
  4. Bonds & Fixed Income

    Wrap Accounts: A Gift Of Advice?

    Fee-based accounts were banned in 2007, but a on a practical level, this service remains the same for investors.
  5. Professionals

    Are These the 10 Best Stocks in the World?

    Most of the top 10 stocks in the world have performed exceptionally well over the past several years. Here's a look at their future prospects.
  6. Professionals

    Investors Beware! Don't Make These Dumb Mistakes

    Sometimes mistakes make for the best lessons. That said, it's still better to learn from someone else's investing mistakes.
  7. Professionals

    Does that Budget Leave Room for Charitable Giving?

    Your clients want to be philanthropic, but does their financial situation allow them to afford charitable giving?
  8. Professionals

    How Advisors Can Help New Doctors Conquer Debt

    Doctors have high potential for building long-lasting wealth, but they need advice on the best way to pay off student loan debt first.
  9. Professionals

    The Art of Procuring More of Your Clients' Assets

    Taking over a larger portion of client assets is an art. Here are some tips on how to increase your asset management.
  10. Investing

    How to Protect Your Retirement After a Divorce

    Divorce is never fun, but knowing the rules and anticipating the impact of retirement plan division and pension payouts can make things easier.

You May Also Like

Hot Definitions
  1. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  2. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  3. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  4. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  5. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  6. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!