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Fee-based (managed) accounts charge an ongoing fee based on your total assets (this is expressed as an annual charge, typically paid on a monthly basis). These accounts offer more investment options and allow for greater flexibility as your financial professional can modify your investments on an ongoing basis. Think of this like a subscription fee with no commitments. Your financial professional regularly manages the accounts and has a Fiduciary duty to put your interests ahead of their own.
Commission accounts charge a one-time upfront fee on any new money (your initial investment and ongoing contributions). Although this type of account can be cheaper, especially with breakpoint discounts, flexibility is limited as you need to stay within the same investment company. Moving to another investment company would require paying a new sales charge. These accounts are used for investors that anticipate very little trading. They are not regularly monitored and do not require your financial professional to act in a Fiduciary capacity.
Fee-based (managed) accounts charge an ongoing fee based on your total assets (this is expressed as an annual charge, typically paid on a monthly basis). These accounts offer more investment options and allow for greater flexibility as your financial professional can modify your investments on an ongoing basis. Think of this like a subscription fee with no commitments. Your financial professional regularly manages the accounts and has a Fiduciary duty to put your interests ahead of their own.
Commission accounts charge a one-time upfront fee on any new money (your initial investment and ongoing contributions). Although this type of account can be cheaper, especially with breakpoint discounts, flexibility is limited as you need to stay within the same investment company. Moving to another investment company would require paying a new sales charge. These accounts are used for investors that anticipate very little trading. They are not regularly monitored and do not require your financial professional to act in a Fiduciary capacity.