Change of broker and 12b-1 fees

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Aug 10, 2008 10:14 am

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!

Aug 10, 2008 11:11 pm

What Ice said

Aug 11, 2008 1:08 pm

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.

Aug 11, 2008 7:47 pm

Thanks guys!

Aug 11, 2008 10:48 pm

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.

Aug 12, 2008 8:34 am

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.