Mutual-Fund Advisory Program
A portfolio of mutual funds that are selected to match a pre-set asset allocation model based on the investor's objectives and offered in a single investment account together with the services of a professional investment advisor. Typically, investors won't be charged separate transaction fees, but periodic (i.e. monthly/quarterly/yearly) asset-management fees based on the average value of assets held within the account. Also known as a "mutual fund wrap".
Investopedia Commentary
Unlike managed accounts where the financial advisor has full discretion over any investment decisions, mutual-fund advisory programs allow the investor to work with the advisor in developing the optimal asset-allocation strategy. The advisor will help determine which model is best based on various factors such as the investor's goals, risk tolerance, time horizon and income, while providing ongoing guidance and investment support.
Related Links
Wrap It Up: The Vocabulary and Benefits of Managed Money
Introduction To Mutual Fund Wraps
See also: Asset Allocation, Asset Management, Investment Advisor, Multi-Discipline Account, Mutual Fund, Risk Tolerance, Separate Account, Wrap Account
Also spelled: Mutual Fund Advisory Program