Wrap platforms are an increasingly popular investment option. Why? Because they make it easier to be a better investor.
Getting your finances right is like a trip to the department store: you come out with everything you need – and an arm-wearying load of bags and packages. It’s a similar story with your money. To grow and protect your wealth you may need a cash account, managed funds, insurance and - of course - superannuation.
Depending on your investment experience, tax situation and personal goals you might also buy some direct shares and borrow to invest via a margin loan.
Put all that together and you’re a long way towards financial security, covering your short term needs, growing your wealth, protecting your family and preparing for retirement. Unfortunately, what you’ve also got is all those bags and packages. Pulling those products together means many things to keep track of lots – and lots – of paper.
That’s why Wrap platforms were invented. They help you consolidate all your investments and superannuation. As the name suggests, a wrap is an online investment administration account that ‘wraps’ your finances into one easy-to-manage parcel which you can access 24/7, similar to internet banking.
The benefits of Wrap: Loads of choice, easy diversification
Diversification – spreading your money across different investment structures, managers, types and countries – is a key investment principal. A Wrap platform makes it easy by giving you access to all ASX Australian shares and hundreds of managed funds – it’s just like an online department store/supermarket for investments and superannuation. Economies of scale also mean many of those funds are offered with (cheaper) wholesale fees.
Easy administration
Wrap platforms cut the paperwork a complete financial plan used to involve. Instead of different companies and fund managers sending you transaction confirmations, statements and tax data for each fund or share, you get consolidated investment reporting and a single tax report at the end of the financial year. That’s less paperwork for you and less work for your accountant.
Instant information
The technology that underpins Wrap platforms means you get 24/7 access to your investment and superannuation portfolio. Online information means you (and your adviser ) always know what’s happening to your money. Online transacting lets your adviser move quickly to take advantage of investment opportunities or manage any changes to your financial strategy.
It’s not rocket science
Wernher von Braun, the legendary rocket scientist, once said, “We can lick gravity, but sometimes the paperwork is overwhelming.”
