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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Presenting the bank's case before the banking royal commission, Daniel Huggins, the bank's executive general manager of home buying, told the commission, 'The longer the loan takes to pay off and the larger it is, then the larger the trailing commission and that can lead to a conflict - that is a conflict - between the customer and the broker.
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.
Advisors don't get a trailing commission when their clients live past age 100.
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments.
My understanding is that we'll be able to continue to receive trailing commissions for advice provided prior to the rule's effective date in April 2017.
There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments.
During the period, for instance, sales commissions and net recruiting "slowed," and lower asset levels "reduced trailing commissions, advisory fees and asset-based fees.
Advisors that were earning trailing commissions on bundled, pre-RDR investment products are also impacted by the new rules.
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.