Wrap Fee Agreement

Paying a wrapping fee can be a good option for investors who intend to use the full range of their broker`s services as they pay for all the direct services the client receives. Wrapping fees include fees such as commissions, trading fees, consulting fees, and other investment costs. The fee also covers administrative costs incurred by investment firms, which are typically a full-service brokerage firm or affiliated or unrelated brokerage firms. The SEC`s Office of Investor Education and Advocacy is issuing this Investor Bulletin to provide investors with information about wrapping fee programs sponsored by investment advisors. This Bulletin contains basic information about wrapping fee programs and some questions you should ask your investment advisor before deciding to open an account in the wrapping fee program. Details of an investment professional`s background and qualifications, as well as a copy of the Envelope Fee Program brochure, are available on the SEC Public Disclosure (IAPD) website or on the SEC`s website for retail investors Investor.gov. If you have questions about how to check the background of an investment professional, you can call the SEC`s toll-free investor helpline at (800) 732-0330 for assistance. 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. Since there may be multiple entities or intermediaries involved in a package fee program, the responsibility of providing the brochure can be confusing. Ultimately, the Sponsor must ensure that all customers with an account in their program have received a copy of the brochure. However, the Sponsor is not required to deliver the brochure. The investment advisor registered with the sponsor is not required to provide the brochure if another registered investment advisor is required to provide the information brochure to clients. Clients usually confirm receipt of the brochure in the program contract or in a separate receipt from Schedule 1. I understand that I can access www.alphaclone.com to obtain certain information documents on the investments required related to my participation in the alphaClone Wrap Fee program. I agree to the electronic delivery of these disclosure materials, including, where applicable, Part II of the ADV for AlphaClone, the AlphaClone Investment Advisor Disclosure Brochure (Form ADV Part II) and alphaClone`s Privacy Policy. However, wrap accounts are not for everyone. That`s because the fees associated with it can be quite expensive and can quickly hurt returns. As mentioned above, wrap accounts can charge between 1% and 3% of total assets under management – a fairly high price, especially for investors with a small nest egg.

People who can`t afford wrapping fees and those who prefer a passive buying and holding strategy may be better off with individual investments. In addition, investors with wrap accounts may be charged additional fees. B for example a mutual fund with an expense ratio. What services and fees do packaging fees usually cover? 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 how inexpensive a wrap account is for their financial situation. .

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