Henry pays his financial planner a one percent fee based on the value of the assets in his investment account. He noticed on his year-end statement that the firm rebated a $1,200 credit to his account. His planner said that was because the firm made $1,200 in dealer concessions from an IPO that he purchased. What type of fee arrangement is this?

Question

Quizplus · Accepted Answer

The fee offset by commission arrangement involves reducing the fee by the amount of commissions or concessions earned, as seen with the $1,200 rebate from the IPO.

Henry Pays His Financial Planner a One Percent Fee Based