A wrap account wraps an investor's unit trust investments into a single online account.
Such consolidation allows the financial planners to monitor and rebalance their investors' portfolios
through different investment and economic cycles more efficiently.
With a wrap account, the investors are only required to pay the sales charge each time they place an investment amount
of their choice into the wrap account. Subsequent switching between funds on the platform are free, thus allowing investors
to adjust their investment goals accordingly without incurring high cost.
To remunerate the financial planners for managing the investors' portfolios, the wrap account encompasses both the commission
and annual wrap fee (annual recurring fee). This wrap account model aligns the interests of both the financial planners and the
investors by tying the planners' remuneration to the investors' portfolio performance.
The annual wrap fee is calculated as a percentage of the total value of the investment portfolio. Therefore,
if the investor's investment portfolio value increases, so will the financial planner's remuneration.
Thus, such a structure ensures that the investor's long-term interests are well taken care of by the financial planner.
The annual wrap fee also ensures that the financial planners provide quality on-going services to keep investors' assets under their advice.
The use of wrap accounts has grown rapidly throughout the years and it is available in most developed financial markets
such as US, Australia, United Kingdom and Singapore.
Currently, iFAST Capital Sdn Bhd is the first to offer the wrap account service in Malaysia.
Benefits of the iFAST Wrap Account
Among the many benefits of the iFAST wrap account :
- Investments into various funds from multiple fund houses can be done using a single online wrap account
- Ease of making payments as all investment transactions into various fund houses can be done with one single payment
- Less administrative work and easier monitoring of investments as statements from different fund houses are consolidated into one concise version
- Free unlimited switching between funds from the same fund house as well as different fund houses
- Attractive and lower sales charge for unit trusts investments
- Able to access and track all unit trust investments through a single point
- Buying, selling and switching of unit trusts can be done conveniently online
