There's long been a big debate over the value of wrap accounts. They were designed to be marketed to investors who had issues with traditional commissions. But they tend to be expensive, very expensive if you don't trade much.

Some new wrinkles on this old issue have emerged with the FINRA complaint lodged by the city of Burlington against Morgan Stanley (MS), its former pension advisor. It alleges two things, according to Forbes. First, the city charges that "Morgan Stanley selected for its account only managers who funneled a portion of their management fees to the brokerage firm. This in turn led the managers to charge excessive fees for their services."

In addition, the city charges that Morgan Stanley charged marked up prices when buying and selling securities, so as to generate more profit that it kept. The city hired transaction analysts to examine the trades executed on the Burlington fund's behalf. These practices were contributors to a $21 million shortfall, according to the city.   

For more:
- here's the article

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