With banks relying more than ever on fee-based products for income and as the personal financial services industry continues to boom, new products are constantly being introduced to Hong Kong.
One such product is a wrap account, which wraps an investor's entire financial assets onto one platform. Normally, brokerage account costs are also wrapped into a single or fixed fee, charged on a flat quarterly or annual basis and cover all administrative, research, advisory, and management expenses.
To find out more about it, we spoke to Kathryn Dioth, chief executive of ING Platform Services.
What is a wrap account? A wrap account is a technology driven investment administration service that gives investors control over all their investments, speeds up transactions, as well as consolidates and simplifies account keeping. The US was the first market to use wrap accounts almost 20 years ago. They are now widely used by investors in the US and Australia, and are gaining popularity in Britain and Singapore. In Hong Kong and other Asia-Pacific regions, the concept of wrap accounts is relatively new. However, more and more investors are being introduced as financial advisers themselves are adopting the concept.
I-WRAP is the name of the wrap account offered by ING Platform Services. It is a service for financial advisers to use with investors who wish to make mutual fund investments. We do not offer the service directly to investors.
How is it different from using a bank online trading account to purchase mutual funds and stocks? Most investors with a bank account can open an online trading account for mutual funds. However, the choice will be limited, fees will be inflexible and there will be no assistance for selecting the right funds.
I-WRAP can only be accessed by investors through a financial adviser. It gives the adviser a much broader choice of funds and comprehensive tools for financial planning, portfolio construction and fund selection. The service also provides account keeping and valuation reporting for both the adviser and investor.
