The annual fee paid to fund platforms, discount brokers and financial advisers for investments such as bonds, trust and pensions and other investments is known as trail commission. The fee is paid annually and consists of a percentage of the investment this usually ranges from 0.4-0.8%. It is important to find out from your manager what the aim of the trail commission is. At times the fees go into the pockets of managers who have nothing to do with managing the account.
According to new FFMA regulations Trail Commissions are illegal as of 2015. However, those who have a lingering trail commission that was set before the new regulations came into place; we suggest that the public do the following:
In the event that you are recommended by a professional to pay for one of the above products it is your obligation to ask about all fees including the trail commission. Before starting payments, do your best to negotiate the percentage.