Trailer Fee
The embedded commission paid annually from a mutual fund’s MER to the dealer who sold it to you.
Trailers are how most Canadian advisors got paid for decades, typically 1% per year on equity funds and 0.5% on fixed income, paid for as long as you hold the fund. The CSA banned trailer fees on order-execution-only (discount broker) accounts in June 2022 because no advice is being given. Deferred Sales Charge (DSC) funds, the worst version (you paid a back-end load if you redeemed early), were banned outright on new sales in June 2022. If your advisor still puts you in Series A funds, ask why you are not in Series F (fee-based) or low-cost ETFs.
A 60-second lesson that puts this term in context, alongside the others, lives inside the Finlo app.