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Sep 3, 2014 8:35 pm

So I am a few months into the new role of FA with an independent broker/dealer.  What is the industry norm on earning commisions on mutual funds ?  I know that the A shares are a much higher payout up front and I know that the standard is approx 1 % on C shares payed out quarterly. But, 2 questions: HOW MUCH is the payout on C shares up front ? and When do funds start paying you (C Class) on accounts that you rolled over "in kind" ?

Sep 13, 2014 7:08 pm

For A shares - it depends a lot on the dealer concession, the breakpoint, and your net percentage. Put somebody into almost any mutual fund family with $1mm and they pay no sales charges, but your BD gets a 1% finder’s fee, and you get your % net of that. Put $35k into most fund families and they (client) pay 5.75%, your BD gets 5%, and you get whatever your commission percentage of that.

I dont’ do C-shares, but I understand you get a 1% ‘dealer’s concession’ on the business when it comes in - of which you get your net percentage. Then you see about .75% annually on top of the normal 12b-1, of which you see your typical net %.

The C-shares I’ve rolled over started paying me right away (i.e. within a month of rollover). But it’s not much, frankly - I’d be better of chasing new money than figuring out when/how those fees hit.