Wraps & Master Trusts
What are Wraps & Master Trusts?

Since it is quite common for investors to hold units in a number of managed funds,wraps and master trust were developed as a wrapper to managed funds to simplify managing your investments.

A master trust is an investment wrapper allowing you to invest in a range of managed funds within the wrapper.

A wrap account is a very similar product allowing you to also include direct investments like shares and property. The main benefit of Wraps and Master Trusts is consolidated reporting of all your managed funds and/or shares and property investments.  Rather than receiving and tracking your investments through several end of year tax statements or web logins a Wrap or Master Trust simplifies your reporting by providing you with one login and statement across all your assets held within the wrapper.

Wrap/Master Trust wrapper provides consolidated report
Grouping investors managed funds within wraps can impact on charges

Although Master Trusts and Wraps have another set of management fees on top of investing in just the underlying managed funds, in many cases Master Trusts and Wraps also reduce the underlying management fees.  Since Wrap and Master Trust providers are able to reduce the administration burden on managed fund providers they are also able to negotiate reduced wholesale rates and therefore the final fees are not that different to that charged by a retail fund.

Unfortunately some advisers see this as an opportunity to increase their commission payments rather than reducing your fund charges.  Contact us to see how our fee for service approach can impact on your overall fund charges.