Loading the player...

DEFINITION of 'Mutual-Fund Advisory Program'

A mutual fund advisory program is a portfolio of mutual funds that are selected to match a pre-set asset allocation. The pre-set asset allocation model is based on the investor's objectives and offered in a single investment account together with the services of a professional investment adviser. Typically, investors will not 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."

BREAKING DOWN 'Mutual-Fund Advisory Program'

Unlike managed accounts, where the financial adviser has full discretion over any investment decisions, mutual-fund advisory programs allow the investor to work with the adviser in developing the optimal asset-allocation strategy. The adviser 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.

Benefits of Mutual-Fund Advisory Programs

Investors in mutual-fund advisory programs can benefit from lower trading costs and a professionally advised portfolio based on their personalized investing interests. The annual wrap fee is usually tiered based on assets in the program. It can range from approximately 0.25% to 3%, depending on the program, and is in addition to the annual operating fees charged by the funds in the portfolio.


Mutual-fund advisory programs can be a good investment option for investors. However, the increasing presence of robo-advisers has created competition for these programs. As a result, many full-service brokerage firms have begun to offer robo-adviser alternatives for their customers. Schwab’s Intelligent Portfolios are one example.

Robo-adviser platforms typically provide the same investment profiling and portfolio building services. They offer some additional benefits in that the service is automated, fees can be lower and investment minimums are usually lower. With the lower minimum investments, robo advice wrap programs can be offered to investors seeking to build a managed portfolio with only $5,000. Currently most robo advice wrap programs use exchange-traded funds (ETFs) rather than mutual funds.

Example of a Mutual Fund Advisory Program

UBS offers PACE (Personalized Asset Consulting and Evaluation), a fee-based, nondiscretionary mutual fund advisory program utilizing a disciplined approach to selecting and building a diversified portfolio of mutual funds. Here's how PACE works:

  • A financial adviser creates an investor profile that contains information about your investing goals, time frames and comfort level with risk.
  • You and your financial adviser select from a list of mutual funds
  • You may choose PACE Multi Adviser (a broad range of no-load or load-waived mutual funds at net asset value) or PACE Select Advisers (a refined list of leading no-load funds brought to you by UBS Global Asset Management)
  • Your mutual funds will be continually monitored by UBS research professionals
  • You'll receive monthly statements
  1. Mutual Fund Wrap

    A mutual fund wrap is a personal wealth management service that ...
  2. Mutual Fund

    Mutual funds combine money from many investors to invest in a ...
  3. ETF Wrap

    An ETF wrap is an investment portfolio in which an investor, ...
  4. Advisory Management

    Advisory management refers to the provision of professional, ...
  5. Wrap Fee

    A wrap fee is a comprehensive charge levied by an investment ...
  6. Wrap Account

    A wrap account is a brokerage account that manages an investor's ...
Related Articles
  1. Investing

    That's a (Mutual Fund) Wrap!

    Wrap mutual funds offer professional supervision and other tools for a diversified portfolio.
  2. Investing

    ETFs vs. Mutual Funds: How They Compare

    ETFs and mutual funds have distinct differences that investors need to understand.
  3. Investing

    Consider These Fees When Evaluating Mutual Funds

    The best way to evaluate a mutual fund is by digging a bit deeper into the fees charged.
  4. Investing

    Trading Mutual Funds for a Living: Is It Possible?

    Find out why trading mutual funds for a living isn't your best bet, including how funds discourage short-term trading and which options may better serve you.
  5. Financial Advisor

    How to Rate Your Mutual Fund Manager

    What to really look for when you're deciding on a mutual fund.
  6. Investing

    How to Buy Mutual Funds Online

    Learn how to buy mutual funds online. Discover which websites offer mutual fund trading services, how to choose a fund and typical fees.
  7. Investing

    No Load Vs. Index Fund: Is One Better Than the Other?

    Find out how no-load funds, index mutual funds and ETFs can help investors boost returns just by cutting down on expenses and sales charges.
  8. Investing

    Mutual Fund Trading Rules

    Make sure to review this guide on the dos and don'ts of mutual fund trading before you invest, including how trades are executed and which fees to look out for.
  1. Is It a Good Idea to Buy Mutual Funds From Banks?

    Mutual funds can be purchased through many different financial institutions, including banks. Read Answer >>
  2. How Do You Find Out the Price of a Mutual Fund?

    The easiest way to find out the price of a mutual fund is to look at its net asset value (NAV). Read Answer >>
Trading Center