This bulletin outlines best practice recommendations related to the application of Fee-For-Services (FFS) and Front-End (FE) Commission rates by representatives. These practices are intended to ensure consistency, transparency, and compliance with regulatory obligations.
Fee For Services (FFS) Guidelines
- Maximum FFS Rate: 1.00%
- Minimum FFS Rate: 0.25% (25 basis points)
- Deviation from these rates: Any request to charge a FFS rate outside of this range must be submitted in writing to Compliance for review and pre-approval.
- Clients with existing FFS rates under 0.25% will be grandfathered.
Front-End (FE) Commission Guidelines
- Recommended Maximum FE Commission: 1.00%
- Charging more than 1% FE: Representatives are cautioned against charging FE commissions above 1.00% without prior discussion with and approval from their Regional Compliance Officer (RCO).
- Best Practice: Charging no more than 1% in FE commissions aligns with fairness principles and client-first regulatory expectations.
Important Note on Switch Fees
- Switch Fees not permitted: Representatives are prohibited from charging FE commissions or any other fees for switches within the same fund company, or on fund transfers between fund companies for existing clients.
- Pre-approval required: If a representative believes a FE commission is appropriate for a specific transfer or switch, they must review with their RCO and obtain pre-approval before placing the trade.
Summary – Key Expectations
|
Fee Type |
Max Rate |
Min Rate |
Approval Needed for Exceptions |
|
Fee For Service |
1.00% |
0.25% |
Yes – contact your RCO |
|
Front-End Commission |
1.00% |
N/A |
Yes – contact your RCO |
|
Switch/Transfer Fee |
Not generally permitted |
N/A |
Yes – contact your RCO |
Questions?
For any questions regarding these guidelines, or to request an exception, please contact your Regional Compliance Officer.