Wrap Fee

A wrap fee is a comprehensive, all-in-one fee charged as a percentage of assets under management (AUM) that covers investment management, trading costs, and administrative services. Instead of paying separate fees for each service, the investor pays one bundled ("wrapped") fee.

What a Wrap Fee Typically Includes:

1. Investment management — portfolio construction and rebalancing
2. Trading commissions — no separate per-trade charges
3. Research and analysis — market reports, stock research
4. Administrative services — statements, reporting, tax documents
5. Financial planning — ongoing advice and planning

Typical Wrap Fee Ranges:

Service Level	Fee Range
Robo-advisor	0.25%–0.50%
Online advisor	0.50%–1.00%
Full-service advisor	1.00%–2.00%
Private wealth management	0.50%–1.50%

Important: Wrap Fee ≠ Total Cost: The wrap fee usually does NOT include the underlying fund expense ratios. So if you pay a 1.00% wrap fee and your portfolio holds ETFs with 0.10% expense ratios, your total cost is 1.10%.

Wrap Fee vs Other Fee Structures:

Structure	How It Works	Best For
Wrap fee	All-inclusive annual %	Active traders, complex portfolios
Commission-based	Pay per trade	Infrequent traders
Fee-only (flat)	Fixed dollar amount	Clear cost predictability
Fee-only (hourly)	Pay for time spent	Occasional advice

Pros:

• Predictable total cost
• No incentive for advisor to "churn" trades
• Aligns advisor interest with portfolio growth

Cons:

• Expensive for buy-and-hold investors who rarely trade
• May include services you don't need or use
• Must check what's NOT included (fund expenses, custodial fees)