Investing with a Wrap Account

An integrated solution in investment management is a system that allows you to “wrap all your investments together”. These products called are called wrap accounts, platforms, master trusts or Investor Directed Portfolio Services (IDPS).

As an investor, there are many benefits to diversification – not investing all of your money in the same asset. A diversified portfolio can smooth returns and improve performance of your investment portfolio over the long term. Some investors choose to spread their investments over several fund managers as well as over different asset classes because fund managers have different styles and will perform differently over time.

To overcome the massive paperwork demands of having investments with different funds, wrap accounts provide one administrative “platform” through which investments are managed. They can be used for superannuation and non–superannuation investments. The advantages include:

  • You can pay one contribution and have it spread over the investments of your choice. This is a great way to implement a structured ‘dollar cost averaging’ strategy with building an investment portfolio.
  • You can choose from a range of investment products offered by different and complementary fund managers.
  • You can switch investments usually at no cost.
  • All of your investments are consolidated into one report. You will get quarterly performance summaries and an annual report that will contain all the data you need for your tax return.
  • Reduced fees over your entire portfolio.

You will be charged a small fee to use a wrap account service but because it channels larger amounts of money to fund managers, it will access lower investment management fees. The wrap account can also be used to purchase insurance protection for death, total and permanent disablement and income protection.

As advisers, we help our clients to select appropriate investments and monitor their performance and may advocate using a wrap accounts to make your portfolio management easier.

For more information or an obligation free discussion with one of our Advisers, please contact us for details.

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