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.
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An
investment consulting relationship where a client's funds are placed with one or more money managers, and all fees and
commissions are wrapped into one comprehensive fee charged quarterly.
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