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FRC: Fund Companies Change Comp Strategies

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NU Online News Service, Feb. 25, 12:42 p.m. – The soft economy is forcing mutual fund and annuity manufacturers to develop new strategies for compensating wholesalers, according to a new study from Financial Research Corp., Boston.

Researchers at the consulting firm have found that some manufacturers are paying wholesalers to meet or beat target figures for net flow of cash into the funds or annuities.

Other manufacturers are doing more to spread commission payments over longer periods of time, to give wholesalers incentives to help keep the assets on the books.

The FRC researchers also found evidence that manufacturers are now quicker to drop advisors that generate no sales, or low sales.