Wrap Account


DEFINITION of 'Wrap Account'

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.

BREAKING DOWN '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.

  1. Mutual Fund Wrap

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

    A service charge assessed by a broker or investment advisor in ...
  3. Fund Of Funds

    A mutual fund that invests in other mutual funds. This method ...
  4. Separate Account

    1. A privately managed investment account opened through a brokerage ...
  5. Selling Away

    When a broker solicits you to purchase securities not held or ...
  6. Broker

    1. An individual or firm that charges a fee or commission for ...
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