Wrap Account

What Does Wrap Account Mean?
An account in which a brokerage manages an investor's portfolio for a flat quarterly or annual fee. This fee covers all administrative, commission, and management expenses. Sometimes this also includes funds of funds.

Investopedia explains Wrap Account
The advantage of a wrap is that it protects you from overtrading. This is when your broker trades your account excessively to make more commission. Furthermore, because the broker gets a flat annual fee, then he or she only trades when it is advantageous to you. A traditional wrap typically requires an initial investment of at least $50,000 to $100,000.

Related Terms

Broker
Commission
ETF Wrap
Funds of Funds
Mutual Fund Wrap
Selling Away
Separate Account
Wrap Fee
More Related Terms

Related Links

Uncovering The ETF Wrap - Tax benefits, low expense ratios and flexibility - discover the advantages of this new managed money product.
That's A (Mutual Fund) Wrap! - These advisory programs offer professional supervision and other handy tools for building a diversified portfolio.
Wrap It Up: The Vocabulary and Benefits of Managed Money - Find out if fee-based investing is for you by learning its terminology and types of investment vehicles.
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.
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.
What is financial double-dipping?
What is a wrap account and what are the advantages of using one?

Rate this Term: Your Rating: Overall Rating: Vote Now!