Front end Load – The range for front
load commissions is usually 0%-5% of the amount invested.
The agent has discretion on the percentage charged, up to 5%.
The client pays the commissions from the money being invested,
and the balance is used to buy units in the fund. The agent
often receives a higher trailer commission on front load
purchases.
Deferred Sales Charge – Deferred
sales charge is the most common commission choice. The fund
company usually pays a set commission as a percent of the
amount invested. A few companies offer a DSC commission
range. For these companies it is up to the agent to clearly
identify the DSC option chosen. The client pays nothing
up front but will be subject to a decreasing withdrawal
fee which is eliminated usually in five, six or nine years.
Low Sales Charge – a few companies
only offer the low sales charge option. It is usually a
combination of a low front load charge of 0% - 2% and a
higher than normal trailer commission.
No Load – A number of companies
do not pay commissions on their funds. Some of these companies
will pay a trailing commission, but it is often low in relation
to the trailer on similar products offered by other companies.
