What is a Wrap?

A wrap account is a relatively recent development in the world of investments. It is basically an online account that brings your investments and pensions together in one place.

You are allowed all types of assets in a wrap, including shares, bonds, cash, investment trusts, unit trusts and pensions, as well as investments within their own tax-free 'wrappers', such as stocks and shares Isas and self-invested personal pensions (Sipps). Do check whether the provider you're thinking of using imposes any restrictions on the investments you can keep in the wrap account before opening it.

A wrap allows you to monitor the performance of all your investments on a regular basis and have a clear overview of your entire portfolio. Because it is online, the wrap is available to view at anytime, which is helpful when making investment decisions and can prove useful when you come to filling out your tax returns.  

A wrap should be transparent about its fees so that investors know what their total fees will be before using the service. There is usually an administration fee to pay the provider of the wrap and you will still have charges to pay on investments you buy and sell within the wrap.  However, providers often negotiate lower fees on the investments they sell within the wrap.

Major providers of one-stop shop investment platforms include Skandia, Standard Life, Hargreaves Lansdown, Fidelity FundsNetwork and Cofunds which is only available through IFAs or brokers.