Wrap account

Wrap account,

Definition of Wrap account:

  1. Full service investment-brokerage account that offers one (all inclusive) fee for those who can invest more than a specified minimum sum (usually $25,000). This fee covers the charges for services of one or more money managers, account administration, trading commissions, etc., is often paid quarterly, and usually ranges from one to three percent of the invested assets.

  2. A wrap account is an investment portfolio that is professionally managed by a brokerage firm for a flat fee that is charged quarterly or annually. The fee is based on total assets under management (AUM). It is comprehensive, covering all administrative, commission, and management expenses for the account.

  3. Wrap fees range from about 1% to 3% of AUM.

How to use Wrap account in a sentence?

  1. A wrap account is a flat fee for brokerage services based on total assets under management.
  2. In a wrap account, the broker's incentive is to maximize gains rather than generate trading fees.
  3. For active investors, a wrap account may be less expensive than one that charges a commission for every trade.

Meaning of Wrap account & Wrap account Definition