The average wrap-around fee for a dedicated stock broker typically ranges from about 1% to 3% of the assets under management (AUM) annually. These fees are comprehensive, covering most of the administrative, management, and operational costs associated with an investment account. The actual percentage can vary based on several factors, including the amount of assets being managed, the specific services included in the wrap program, and the brokerage firm itself.
For larger accounts or for clients with significant investment amounts, the percentage might be on the lower end of that range, as many firms offer tiered pricing based on the size of the account. Conversely, smaller accounts might see relatively higher fees. These wrap-around fees are popular for their simplicity, allowing investors to pay a single fee that covers all management and transaction costs, avoiding the need for separate transaction fees per trade.
It’s important for clients to review the services provided under these fees and evaluate whether the cost is justified by their investment needs and the level of personalized service they receive.
-ChatGPT 4o
Vanguard’s wrap-around fee is .003 compared to the average of .01 to .03. Over the years, the savings would amount to thousands and thousands of dollars.
-Denton Hawk
