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Form ADV Part 1A Item 5I(2)(a) · Answer type: currency · Item 5 - Wrap Fee Programs
Item 5I(2)(a) reports the dollar amount of the firm's regulatory assets under management attributable to acting as sponsor to a wrap fee program. This represents the portion of regulatory AUM where the firm serves as the wrap program sponsor, providing all-inclusive fee arrangements that bundle advisory services and transaction costs.
As a wrap program sponsor, the firm creates and operates the overall program structure, maintains client relationships, sets fee schedules, selects available investment managers, and takes regulatory responsibility for the program. Sponsor regulatory AUM includes assets from clients who participate in these sponsored wrap programs.
This figure represents only the sponsor role portion of wrap-related assets, not the firm's total involvement in wrap programs. The firm might also serve as portfolio manager within wrap programs (reported in 5I(2)(b)) or serve dual sponsor-and-manager roles (reported in 5I(2)(c)).
5I(2)(a) is a subset of the firm's 5F(2)(c) total regulatory AUM, showing how much of their overall advisory business operates through wrap fee program sponsorship rather than traditional advisory fee arrangements.
Wrap program sponsors typically offer clients a menu of investment managers and strategies within their platform. Clients select managers based on investment objectives and preferences while paying a single wrap fee to the sponsor that covers both advisory services and transaction execution costs.
The sponsor regulatory AUM reflects assets from clients who prefer the cost predictability and convenience of all-inclusive wrap fee structures, particularly clients with active trading strategies or those who want access to multiple specialized managers through a single program relationship.
Form ADV separates wrap roles to prevent double-counting when firms play multiple roles. Assets reported in 5I(2)(c) (sponsor and portfolio manager for the same program) are not also included in 5I(2)(a) or 5I(2)(b) to maintain accurate role-based asset attribution.
5I(2)(a) - Amount of your regulatory assets under management attributable to acting as sponsor to a wrap fee program (currency).
This is one field in Item 5I(2), "Wrap Fee Program Assets." The firm reports sponsor-role regulatory AUM as of its Form ADV reporting date.
5I(2)(a) shows the scale of the firm's wrap program sponsorship business. If you prefer wrap fee arrangements with access to multiple investment managers through a single program, firms with substantial sponsor AUM may offer more developed wrap program capabilities and manager selection.
Large 5I(2)(a) amounts indicate the firm has significant experience operating wrap programs, managing client relationships within all-inclusive fee structures, and overseeing multiple investment managers within their platform. This operational experience can benefit clients seeking comprehensive wrap program services.
The figure does not tell you wrap fee rates, available investment managers, minimum account sizes, or program performance. Wrap programs vary significantly in their structure, costs, and manager quality among different sponsors, regardless of asset scale.
Sponsor regulatory AUM also does not indicate the firm's investment management skill when they also serve as portfolio managers within their wrap programs. Sponsorship involves program operations and client service, while investment performance depends on the selected managers' capabilities.
Higher sponsor AUM might indicate negotiating power with third-party managers and potentially better fee arrangements passed through to clients, but it does not guarantee lower total costs or superior investment outcomes for wrap program participants.
The value is a dollar amount representing sponsor-role regulatory AUM as of the Form ADV reporting date. For example, 40000000 represents $40,000,000 in wrap sponsor regulatory AUM.
On the firm's Best Investors ADV panel, find Item 5I and look for 5I(2)(a) in the wrap assets section. Compare this figure to 5I(2)(b) portfolio manager AUM and 5I(2)(c) dual-role AUM to understand the firm's wrap program role mix.
Also compare 5I(2)(a) to 5F(2)(c) total regulatory AUM to see what portion of the firm's advisory business operates through wrap program sponsorship versus traditional advisory arrangements.
Zero or blank 5I(2)(a) when 5I(1) sponsor is marked No typically means the firm does not sponsor wrap programs, though they might participate as portfolio managers in other firms' programs.
When evaluating wrap programs, ask about available investment managers, fee schedules including any breakpoints for larger accounts, minimum account requirements, and how the sponsor selects and monitors managers within their platform.