trailer fee

Trailer Fee

A fee that a mutual fund manager pays to a salesperson who sells the fund to investors.

Notes:

The trailer fee pays the salesperson for providing the investor with ongoing investment advice and services. It is important to know whether your mutual fund salesperson is receiving a trailer fee because it may cause him or her to try to sell you a particular fund not because it is a good investment but because selling it to you will make him or her money. Also known as a "trailer commission," this fee is paid annually for as long as the investor holds shares in the fund.

See also: 12b-1 Fees, Commission, Expense Ratio, Mutual Fund

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trailer fee

See trailing commission.