Just call us Bond. Amortized bond.
Over 700 finance terms, Shmooped to perfection.
Jay-Z's brokerage account. Or something.
In a wrap account, you pay an annual fee (based on a percentage of what's in the account), and the broker manages the account for you. The fee you pay covers commissions and extra expenses (but not the costs exchanges or the SEC charge). You don't pay extra commissions each time a trade is made in the account, which prevents brokers from making trades just to earn more commissions.
If Jay-Z gives his broker $100 million under a wrap account that charges 1%, he'll be charged a million bucks a year in return for handling all of Jay-Z's trading, wiring, account, and a whole bunch of other services.
For many large brokerages, wrap accounts allow for their clients to be able to buy various flavors of funds (mutual, hedge, index) at "wholesale" prices; that is, if the fund is a captive fund maintained by the brokerage, the wrap account allows the client to buy with no commission or upfront charges.