i am frequently inquired on what the meaning of trailer fee is.
What trailer fee is, is a fee that a mutual fund manager pays to a salesperson who sells the fund to investors. The trailer fee pays the salesperson for providing the investor with ongoing investment advice and services.
Also known as a "trailer commission".
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. This fee is paid annually for as long as the investor holds shares in the fund.
Posted 7 months ago
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