Cryptocurrency Q&A
Who gets paid 12b1 fees?
Who gets paid 12b1 fees?
Valentina
Thu Sep 05 2024
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6 answers
1254
Could you please clarify who exactly is responsible for paying the 12b-1 fees in the context of mutual fund investments? Are these fees deducted from the investor's principal or do they come from some other source? Additionally, what specific services or benefits do these fees cover, and are there any potential conflicts of interest that investors should be aware of when it comes to the distribution of these fees?
6 answers
NebulaPulse
Sat Sep 07 2024
A portion of the 12b-1 fee may also be allocated towards compensating brokers who facilitate the sale of the fund to their clients. This incentivizes brokers to promote funds that charge such fees.
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DondaejiDelightfulCharm
Sat Sep 07 2024
A 12b-1 fee is a financial expense incurred by mutual fund investors. It serves as a means for mutual funds to cover their marketing and distribution expenses, alongside offering additional services to shareholders.
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Carolina
Sat Sep 07 2024
This fee is not mandatory and can vary significantly among different funds. Its primary objective is to ensure that the fund has the necessary resources to promote itself and reach potential investors.
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CryptoPioneer
Fri Sep 06 2024
Critics argue that 12b-1 fees can lead to a conflict of interest, as brokers may prioritize funds with higher fees over those that are more suitable for their clients.
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LitecoinLodestar
Fri Sep 06 2024
However, proponents contend that these fees are essential for mutual funds to remain competitive and accessible to a wide range of investors. They also argue that the services provided to shareholders justify the expense.
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