What Is A Wrap Fee Agreement

Wrapping fee programs can be a convenient way to include all your investment services in one fee. Packing fee schedules vary, so you should always make sure you understand which services are or are not included in the packaging fee. A wrap account is a comprehensive investment option that bundles various securities and funds into a single portfolio. It includes both retirement and non-retirement assets and is managed by an investment manager or investment advisor. Wrap accounts are ideal for investors who want the flexibility to choose their investments while allowing a professional to manage their portfolio. These accounts help simplify the investment process, which is why they come with a full fee called a wrap fee. Packaging fees are attractive for the convenience they add to investment management. Why not pay a bundled fee instead of a bunch of separate individual fees? A wrapping fee program can also be useful if you want to take advantage of your manager`s full range of services. Make sure this is the cost-effective way to manage your assets. You don`t want to assume it`s cheaper right away. You also don`t want to pay a packing fee just for convenience, as you might end up paying more than you would pay without. Wrapping fees are set as a percentage of assets under management (AUM). This amount is between 1% and 3%.

Due to the high cost, investors should decide on the profitability of a wrap account for their financial situation. . . .

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