Your Future Nest Egg

A site called FutureNestEgg explains Management Expense Ratios and Trailing Commissions. Below is an extract from the article relating to trailing fees and commissions

"Another fee hidden inside the management fee is the ‘trailing commission’. It is usually between .25% and .88%.

Not all fund managers charge a trailing commission fee but most do. This is the ongoing fee paid to the adviser by the fund manager (the financial adviser who recommends you the fund). This fee is supposed to cover the ongoing service offered by the adviser to you.

He is supposed to periodically review the portfolio and how the fund is fitting in there…It is for this service the funds pay the advisers.
The reality is much different…The fee is actually being paid to thank the advisers for the loyalty (for picking this fund). It is a rip off….Even the people who go direct to the fund manager (without an adviser) have to pay this fee (because it is hidden inside the MER)."

For the full article go to http://futurenestegg.com/management-expense-ratios-trailing-commissions/