Change of broker and 12b-1 fees
When transferring accounts from another brokerage firm, does the new financial advisor begin to receive the trails on the mutual funds brought over? Thanks in advance!
Keep in mind, that there are calendar cut-offs for the payments (kind of like an ex-dividend date). For instance, if you transfer in some American Funds, and you miss the cut-off for the next quarterly 12b-1 payment, you won’t see any money from that until the NEXT quarterly payment. Each fund company handles the dates differently.
I’d be interested in hearing about fund companies that do not accept change of broker of record firms. There was a recent thread indicating Genworth Insurance does not allow the practice; all trails remain with BD, but I have never heard of this regarding a non-proprietary mutual fund that would have a selling agreement with the next firm.
Most non-proprietary fund families have selling agreements with just about everybody and thus it would not be a problem to get the 12b-1’s going forward. My team has trails coming in from about 35 different companies where we have done change of broker dealer forms in the past. I have not heard of any that will not allow the trails to change, but I am not surprised by your Genworth Insurance comment.