trailing commission

Trailing Commission

A commission that the salesperson of a mutual fund receives each year an investor remains a shareholder. That is, the salesperson receives the first trailing commission when the investor first buys shares in the fund, and a new trailing fee each year thereafter. Critics of this practice point out that it can create a moral hazard that the salesperson will aggressively sell a fund because of his own financial incentive, rather than because he believes it to be a good investment for the potential shareholder. Not all mutual funds pay their sales staff trailing commissions. A trailing commission is also calling a trailer fee. See also: Load.

trailing commission

A commission paid annually to a sales agent for as long as a client's money remains in an account. Also called trailer fee.
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According to the SEC, Stanford paid a 1 percent commission upon the sale of a CD "and as much as an additional 1% trailing commission during the term of the CDs.
However, with the recent ban on entry load for mutual funds, advisors are only earning trailing commission (from the second year onwards) and passing on the same to their clients in a combination model.
The commission structure still comprises a trailing commission of 0.
AstraZeneca will receive a 22 percent commission on net sales of ABRAXANE during the term of the agreement, with a trailing commission of ten percent for the first year and five percent for the second year following the five year term.
In addition, there is a trailing 50 basis points commission (12b-1) distributed annually on each of the funds with the exception of the Global Short-Term Fund, where the trailing commission is 25 basis points, and 30 basis points in the World Bond Fund.
There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments.
Typically, trailing commissions -- the commissions from unfinished deals that follow a broker when they switch firms -- are "rife with concerns," said Laurie McPherson, a partner at the law firm Blank Rome.
This may include so-called 12(b)1 fees, trailing commissions, surrender charges and back-end fees.
Also, in July 2008, Jefferies began remitting all trailing commissions received for frozen ARS held in customer accounts directly to its customers on a go-forward basis, and as of October 2010, had remitted in excess of $868,000.
The OneSaas Partner Program provides training, sales and marketing support material, and generous trailing commissions.