WRAP ACCOUNT at its most basic is an alternative form of commission arrangement between a securities firm and its client. Wrap accounts generally charge the client an annual fee based on assets in the account in lieu of a per transaction commission structure. In other words, the firm "wraps" together all the costs and charges them off as a "management fee". Firms often add further features to wrap accounts such as investment management, custodial services, and enhanced reporting.
UNDERWATER, in securities, is securities held in a portfolio with an unrealized market loss. Selling them would mean realizing the loss and, according to statutory accounting, a reduction in policyholders' surplus.
ASB see ACCOUNTING STANDARDS BOARD.
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