What is a wrap fee?

Packing fees are schedules of associated rates that are charged to the investor. Instead of billing a separate fee for each service that is extended to the client, it will provide brokerage or other type of financial service to the investor's flat fee for all services that are included in the individual investment program. The packaging fee basically maintains the fees simple for both the investor and the service provider. Some financial institutions, such as banks, research companies, investment consulting services and financial management programs, will offer a number of investment programs that the client can decide to participate. The basic program will include a limited number of services, while each subsequent package will include multiple services and will have a slightly higher fee associated with the program.

This inclusion of multiple services for a single -lane fee is often an excellent choice for an investor who needs competent administration and advice on their investment and prefers managementall assets through a common agency. In general, wrap the fee such as brokerage commissions, annual maintenance fees associated with the various accounts that the investor has, and research fees. Some companies require investors to stay with one package for the calendar year, but will allow change at the beginning of next year.

One of the areas where the fees for wrap fees differ is how the investor pays the wrap fee. In some cases, fees can be deducted directly from one of the funds managed by the program. Other programs allow the investor to pay a wrap fee outside the investment managed within the program.

There are some benefits in paying a wrap fee outside Investicements covered within the investment program. In some cases, for example for IRA, the total fee is considered to be a contribution of IRA if the fee is deductedfrom the balance. However, if the packaging fee is paid from IRA sources, the packaging fee may be entitled to be claimed as a tax deductible expense.