Advisor Fee

Dictionary Says

Definition of 'Advisor Fee'

The fee that is paid to a financial advisor for recommending a load mutual fund based on the needs and time-frame of an investor. Fees differ according to the class of mutual fund shares, and are paid to the advisor for recommending a fund that suits an investor's time and goals. Depending on the share class, advisor's can either receive a one-time fee up-front or an annual fee as long as the investor holds the asset.
Investopedia Says

Investopedia explains 'Advisor Fee'

The fee that an investor pays on A shares is upfront, starting at around 4-5% and decreases as more is invested. An investor with a large amount to invest over the long-term would be best suited with A shares. An investor with the same time-frame, but less to invest might do better in B shares. C shares are best for those investing for the short-term. Note that 12b-1 fees, the fees paid to a mutual fund's management, are higher for B and C shares, and lower for A shares. When choosing a class of shares, an investor should consider first how long they can invest. The advisor will get paid either way for directing you into the investment.

Also, investors who already have a fund picked out should pick a no-load fund, sidestepping the extra fees. The load goes to pay for the advice of the advisor. If that advice is not needed, don't pay the price for it.

Articles Of Interest

  1. Published Mutual Fund Returns Not Always What They Appear

    Survivorship bias erases substandard performers, distorting overall mutual fund returns.
  2. Are mutual fund performance numbers reported net of fees (operating expenses and 12b-1)?

    The answer depends on how you define "operating expenses."Let's look at a cinematic metaphor to clear up this apparent ambiguity. A mutual fund's cost is similar to the cost of going to your ...
  3. Mutual Fund Basics Tutorial

    Learn about the basics - and the pitfalls - of investing in mutual funds.
  4. Fund Costs and Expenses

    How much a fund charges for its services is the most important indicator of how well it will perform.
  5. Introduction To Treasury Inflation-Protected Securities (TIPS)

    If you want to protect your portfolio from inflation, all you need are a few TIPS.
  6. 6 Asset Allocation Strategies That Work

    Your portfolio's asset mix is a key factor in whether it's profitable. Find out how to get this delicate balance right.
  7. How To Cut Your Mutual Fund Fees By Up To 90%

    Most mutual funds don’t come close to beating the indexes they’re compared against. And yet they carry steep fees for active management. Find out how a little research and effort can cut your ...
  8. A Top-Down Approach To Investing

    Use a global view to determine which stocks belong in your portfolio.
  9. How Risk Free Is The Risk-Free Rate Of Return?

    This rate is rarely questioned - unless the economy falls into disarray.
  10. Investing With A Purpose

    Your reasons for investing are bound to change as you go through the ups and downs of life. Setting goals is the first step in determining which investment vehicles are right for you.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Racketeering

    Racketeering refers to criminal activity that is performed to benefit an organization such as a crime syndicate. Examples of racketeering activity include...
  2. Lawful Money

    Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves.
  3. Fast Market Rule

    A rule in the United Kingdom that permits market makers to trade outside quoted ranges, when an exchange determines that market movements are so sharp that quotes cannot be kept current.
  4. Absorption Rate

    The rate at which available homes are sold in a specific real estate market during a given time period.
  5. Yellow Sheets

    A United States bulletin that provides updated bid and ask prices as well as other information on over-the-counter (OTC) corporate bonds...
  6. Bailment

    The contractual transfer of possession of assets or property for a specific objective.
Trading Center