What is a trailer fee?
The trailer fee is a payment from the manager of the Mutual Fund for the Seller, which provides support and customer service. As long as the client retains shares in the fund, the seller receives a fee for the trailer. This may potentially create a conflict of interest, and investors may want to ask their advisors about any compensation they receive in connection with clients' activities. Be aware of fees of this nature can help investors make informed decisions when they decide where to invest. Managers set the funds of the fund, analyze available investments, and decide how to distribute assets to maximize revenues. Self -operators can manage operation to the fund, increase the number of investors and make more funds available for investment.
The fund compensates for the seller for the provision of the Council, recommendations and information for investors, basically paying for the seller services. It is not exactly the same as commissions where people receive payment for sales, but do not have continuing support obligations. ClientsThey kiss that they will be able to contact sales representatives in the future if they have questions or concerns or want to leave the fund. Not all funds offer a fee for the trailer and the amount offered may vary.
Clients may be worried about the trailer fee, as this could affect the recommendations. In a situation where the seller receives compensation for the recommendation of a particular product, sellers may be tempted to choose the option that will have the most rather than the best product for the client. Customers may ask why a specific fund is recommended, and may want to get information about alternatives before they decide to invest. This can help find out if the dealer's recommendations are in their best interest.
Laws and ethical standards in some regions require financial services experts to publish financial relations before transactions. In these situations, if rohThe evaluation of the client's investment will ensure a trailer fee for the seller, it is necessary to discuss it. Financial publication may also include detailed account lists for accounts for clients to understand related costs with their investment, such as annual maintenance fees that mutual fund may require to pay if they maintain shares or transaction fees related to the sale of their shares.