Wrap account

Wrap account

A wrap account is one 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. This type of account is also known as an investment platform.

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/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. [ [http://www.investopedia.com/terms/w/wrapaccount.asp Wrap Account] , Investopedia]

Firms that offer this type of account must make several critical disclosures to a client, including [ [http://www.sec.gov/rules/extra/iarules.htm#2043 SEC] , Investment Adviser Act of 1940] :
*the amount of the wrap free charged for the program;
*whether the fees are negotiable;
*the services provided under the program, including types of portfolio management services;
*a description of the nature of any fees that the client may pay in addition to the wrap fee; and
*a statement that the program may cost the client more than purchasing these services separately.

References


Wikimedia Foundation. 2010.

Игры ⚽ Поможем написать реферат

Look at other dictionaries:

  • wrap account — wrap′ account n. bus a personally managed investment account where charges are levied on the basis of the account s total assets • Etymology: 1985–90 …   From formal English to slang

  • 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. The advantage of a wrap is… …   Investment dictionary

  • wrap account — /ˈræp əkaʊnt/ (say rap uhkownt) noun Finance an account, usually a large account, which is managed by an investment broker for an annual or quarterly fee, rather than a commission on transactions. Also, wrap …  

  • wrap account — a personally managed investment account where charges are levied on the basis of the account s total assets. * * * …   Universalium

  • wrap account — a personally managed investment account where charges are levied on the basis of the account s total assets …   Useful english dictionary

  • wrap account — An investment consulting relationship for management of a client s funds by one or more money managers, that bills all fees and commissions in one comprehensive fee charged quarterly. Bloomberg Financial Dictionary …   Financial and business terms

  • Wrap — may refer to: * Wrap (food), a sandwich like food product * Plastic wrap, a thin, clear flexible plastic or aluminum foil to cover food * Shrink wrap, plastic foil to bundle boxes on a pallet for transport * Mud wrap, a type of spa treatment *… …   Wikipedia

  • wrap — [c]/ræp / (say rap) verb (wrapped or wrapt, wrapping) –verb (t) 1. Also, wrap up. to enclose, envelop, or muffle in something wound or folded about. 2. Also, wrap up. to enclose and make fast (an article, bundle, etc.) within a covering of paper… …  

  • wrap-up — /ˈræp ʌp/ (say rap up) noun Colloquial 1. a comprehensive report, with some analysis and evaluation: a detailed wrap up of the election. 2. an enthusiastic account: he gave the new product a good wrap up. Also, wrap. {def. 1 wrap + up; def. 2… …  

  • wrap-up — /rap up /, n. 1. a final report or summary: a wrap up of the evening news. 2. the conclusion or final result: the wrap up of the election campaign. 3. Australian Slang. an enthusiastic recommendation or flattering account. [1950 55; n. use of v.… …   Universalium

Share the article and excerpts

Direct link
… Do a right-click on the link above
and select “Copy Link”