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Wrap Account

Wrap Account Definition

A wrap account is one wherein an investor`s portfolio is being managed by a brokerage who is paid quarterly or annually based on a flat rate. Payment covers all services rendered including admintrative, commission and management. In some cases, a wrap account also includes funds of funds.


Additional meaning of Wrap Account:

 A wrap account can protect  the account holder from a broker overtrading the account.  Overtrading occurs when a broker trades an account excessively to make more commission.  Due to the broker getting a flat annual fee, they will most likely only make trades in the account when it's advantageous to you. Traditionally, a wrap account would require an initial investment of at least $50,000 to $100,000.


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