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IFSE Institute CIFC Exam - Topic 7 Question 16 Discussion

Which of the following statements regarding mutual fund fees is correct?
C) The mutual fund dealer receives trailer fees based on the value of assets under management.
A) Redemptions are made from units held by investors to pay trailer fees.
B) Trailer fees are only paid to mutual fund dealers when a purchase is made.
D) Trading commissions are paid from the management fee.

IFSE Institute CIFC Exam - Topic 7 Question 16 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 16
Topic #: 7
[All CIFC Questions]

Which of the following statements regarding mutual fund fees is correct?

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Suggested Answer: C

by Franklyn at Apr 01, 2026, 01:51 PM

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Merilyn
3 days ago
Wait, are trading commissions really part of the management fee?
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Rana
8 days ago
A is definitely wrong. Redemptions don’t pay trailer fees.
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Gail
2 months ago
I thought trailer fees were only paid at purchase?
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Lisha
2 months ago
C is correct! Dealers get trailer fees based on assets.
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Anissa
3 months ago
I’m confused about the management fee and trading commissions. I thought they were separate, so I’m not sure about option D being correct.
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Denny
3 months ago
I recall a practice question about how trailer fees work, and I think they are indeed paid based on the value of the assets, which again points to C.
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Buffy
3 months ago
I’m not entirely sure, but I feel like redemptions don’t directly pay trailer fees. I might be mixing it up with something else we studied.
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Leonora
3 months ago
I think I remember that trailer fees are ongoing, so they might be based on the assets under management, which makes me lean towards option C.
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