Advisor Group cuts pricing for wrap fee accounts

Advisor Group cuts pricing for wrap fee accounts
Broker-dealers have been competing to lower fees in order to reduce potential conflicts of interest
OCT 28, 2020

Advisor Group is lowering fees on adviser-managed portfolios, commonly known in the industry as wrap accounts, by as much as 50%.

The pricing for such wrap fee accounts, based on client assets, now starts at nine basis points, with larger accounts as low as three basis points. Advisers determine the total fee to charge to clients, and the asset-based fee comes out of the total client fee.

Lower fees benefit advisers and their clients. There has been jockeying among broker-dealers since the Department of Labor's now-defunct fiduciary rule to change or reduce pricing models in order to diminish conflicts of interest created by certain charges and commissions.

And Advisor Group, a network of close to 11,000 financial advisers, will also not raise various affiliation fees on advisers in 2021, according to CEO Jamie Price, who spoke Tuesday afternoon to kick off a virtual version of the firm's annual meeting, called ConnectED.

“Our wrap pricing on adviser managed [accounts] has been extremely expensive,” Price said. “We’re going to cut it by 50%,” he added, with the new pricing model among “the most competitive on the Street,” and leveraging Advisor Group's “scale and our clout.”

“Adviser-managed asset-based pricing — sometimes referred to as a wrap — enables advisers to charge a fee that is not tied to the number of trades they make, removing any potential conflicts of interest based on the cost of the trade,” Price said in a follow-up conversation with InvestmentNews. “We are focused on supporting the ability of our financial professionals to serve their clients in a fee-based relationship, which is where the future of wealth management is heading.”

Latest News

Why the off-channel comms problem is far from solved
Why the off-channel comms problem is far from solved

Despite a lighter regulatory outlook and staffing disruptions at the SEC, one compliance expert says RIA firms shouldn't expect a "free pass."

FINRA penalizes another broker dealer for social media miscues
FINRA penalizes another broker dealer for social media miscues

FINRA has been focused on firms and their use of social media for several years.

Advisor moves: LPL recruits Merrill alum, Raymond James adds defectors from Edward Jones and Janney
Advisor moves: LPL recruits Merrill alum, Raymond James adds defectors from Edward Jones and Janney

RayJay's latest additions bolster its independent advisor channel's presence across Pennsylvania, Florida, and Washington.

Cantor Fitzgerald to acquire hedge fund unit from UBS
Cantor Fitzgerald to acquire hedge fund unit from UBS

The deal ending more than 30 years of ownership by the Swiss bank includes six investment strategies representing more than $11 billion in AUM.

Navigating life’s big transitions for women clients
Navigating life’s big transitions for women clients

Divorce, widowhood, and retirement are events when financial advisors may provide stability and guidance.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave

SPONSORED The evolution of private credit

From direct lending to asset-based finance to commercial real estate debt.