A wrap, as the term suggests, is a means of wrapping up your investment assets and holding them in one place. A wrap combines three services. Firstly it provides a set of administration systems that allow your investments to be pulled together and managed in one place, secondly, an arrangement for buying and selling investments efficiently and often at lower cost and thirdly the ability to hold your investments in savings vehicles that offer you tax advantages.

Key Features of a Wrap

Improved investment strategies

Investors and their financial advisers often have to deal with large numbers of financial companies to get an accurate, up to date picture of their investments. Within a wrap, both you and your financial adviser are able to see the latest performance and value of what you own at a glance. As a result your adviser will be able to focus on important investment decisions rather than administration.

Discounted trading

Using what is sometimes called a ‘trading platform’ or ‘fund supermarket’, a wrap provider will set up arrangements with fund managers and stockbrokers to provide advisers with the facility to buy and sell investments of all types. Through negotiation, wrap providers are often able to offer you significantly reduced fund charges compared to those available to retail investors.

Not just
a pension

Unlike a SIPP, a wrap is designed to pull together all your investments, not just your pension. It will allow you to include almost all types of investment such as ISAs, offshore bonds, cash accounts and privately held investment portfolios as well as your pension. There may be the functionality to allow assets such as property and works of art to be manually recorded to provide a truly comprehensive picture of your financial position.

Less paperwork

The administrative systems that support a wrap will help to streamline the paperwork you need to maintain to stay in control of your portfolio.

Selecting the right wrap provider

As is the case with SIPPs, your adviser will need to consider which wrap best suits your situation. A number of factors will have a bearing on their recommendation:

Fees charged for setting up and administering your account
The discounts negotiated with fund managers for the investment platform
The choice of investment types and range of funds on offer
The reputation of a wrap provider for efficiency and service
The degree to which a wrap can be managed on line to speed up access and investment transactions
The quality of reporting provided and the tools available to help your adviser analyse your portfolio

Points to consider
A Wrap may not be suitable for all investors and if you are in any doubt you should consult your financial adviser. James Hay Partnership is not authorised to give financial advice. If you do not already have a financial adviser, information can be obtained from http://www.unbiased.co.uk/ .

For more information on the risks associated with SIPPs, please read our guide; SIPPs & Wraps: assessing the risk.

Tax Risk Warning

Current pensions and tax legislation and HMRC practice could change in the future. This may affect the value of your wrap and pension benefits you receive from the Wrap SIPP if you have one. In addition, your individual circumstances will impact the tax treatment of the product elements of your Wrap and may also be subject to change in the future.

Capital At Risk Warning

The value of your Wrap will be determined by the valuation of all the investments held within it. Depending on the type of investments that you choose to hold within your Wrap, some of these may not return the amount you initially invested especially where their value can go down as well as up. This could also impact the level of benefits you can take on your retirement from your Wrap SIPP if held.

You can also find useful and impartial information about pensions, savings and investments on the Money Advice Service website, formerly the UK Consumer Financial Education Body (CFEB).

Please see our Legal section for full details of each company within the James Hay Partnership and its regulatory status.

Improved investment strategies	Investors and their financial advisers often have to deal with large numbers of financial companies to get an accurate, up to date picture of their investments. Within a wrap, both you and your financial adviser are able to see the latest performance and value of what you own at a glance. As a result your adviser will be able to focus on important investment decisions rather than administration.
Discounted trading	Using what is sometimes called a ‘trading platform’ or ‘fund supermarket’, a wrap provider will set up arrangements with fund managers and stockbrokers to provide advisers with the facility to buy and sell investments of all types. Through negotiation, wrap providers are often able to offer you significantly reduced fund charges compared to those available to retail investors.
Not just a pension	Unlike a SIPP, a wrap is designed to pull together all your investments, not just your pension. It will allow you to include almost all types of investment such as ISAs, offshore bonds, cash accounts and privately held investment portfolios as well as your pension. There may be the functionality to allow assets such as property and works of art to be manually recorded to provide a truly comprehensive picture of your financial position.
Less paperwork	The administrative systems that support a wrap will help to streamline the paperwork you need to maintain to stay in control of your portfolio.