A more thorough explanation:

Definition: A type of investment account where the investor pays a fee based on a percentage of the total assets to be managed. The investor selects an account manager who makes investment decisions on their behalf.

Examples: An investor with a wrap-fee account may have a portfolio of investments, including stocks, bonds, and cash. The account manager makes decisions about which specific investments to buy and sell, but the investor provides a risk profile and may have some input on the overall strategy. The fee for the account is based on a percentage of the total assets being managed, so the account manager has an incentive to grow the account.

Explanation: The example illustrates the definition by showing how a wrap-fee account works in practice. The investor pays a fee to have an account manager make investment decisions on their behalf, which can be beneficial for those who do not have the time or expertise to manage their own investments. The fee structure also aligns the interests of the account manager with those of the investor, as the account manager is incentivized to grow the account.