Wrap Fee Sponsors

Wrap fee arrangements are arrangements between broker-dealers, investment advisers, banks, and other financial institutions (typically acting as sponsors of the wrap fee arrangements) and affiliated and unaffiliated investment advisers (or portfolio managers) through which customers receive discretionary investment advisory, execution, clearing, and custodial services in a bundled form. In exchange for these bundled services, customers pay an all-inclusive – or “wrap” – fee determined as a percentage of the assets held in the wrap fee account.

In recent years, wrap fee programs have been subject to considerable scrutiny by the SEC staff, state securities regulators, and the North American Securities Administrators Association, Inc. (NASAA). We have substantial experience in assisting investment advisers and broker-dealers in developing and operating wrap fee programs, including so-called “mutual fund wrap programs.”