Wrap Account

An investment account in which the investor receives brokerage and other investment services for a single, predetermined price -- usually a percentage of assets ranging from 1 percent to 3 percent. Wrap accounts have gained popularity in recent years, in part because many investors got tired of putting their money into funds that ""nickel-and-dimed"" them with smaller fees.

A wrap fee can also remove the temptation for a broker to repeatedly buy and sell (churn) for the sole purpose of generating commissions.

 

 

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