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Banks that do this type of analysis tend to offer you their own home-grown funds, which are generally loaded with fees and don't perform as well as funds that you can buy elsewhere because of this.

I would strongly disagree with this assessment. The benefit of a wrap account is so that you can have funds from many different fund families - without having to pay any sales charges. In the case where they do use "home-grown" funds (at least in my experience), they use funds that are institutional (typically requiring investments of 1-5 million to start) and have significantly lower expenses due to such.

Your mileage may vary of course but with regard to retirement accounts, ERISA laws specifically FORBID a bank from using their "home grown" funds within a wrap account.
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