What is a trailing commission?
Trailing fees and commissions are not well known or understood and can have a significant impact on your wealth creation. “Trailing commissions” are yearly commissions which are paid to the body that introduced you to your financial institutions, or that your nominate. Typically this is your broker, financial adviser or fund supermarket. These payments are made even where you have gone directly to the fund manager. Trailing commissions are unavoidable and where no introducer is recorded on your investments these payments are retained by the fund manager. These fees typically range between 0.2% and 1.1% per annum of the total value of your investments. These fees are paid every year for the life of your investment. Per Choice magazine – Trail commissions – October 2005 “Millions of dollars per year are paid by fund managers to financial planners and discount brokers in the form of ongoing commissions, known as trails or adviser service fees. These commissions are paid out of the money y
