This is a model where there is an upfront cost, or sales charge, on all new monies that enter your portfolio. For example, a typical one-time fee for a mutual fund investment of $100,000 would be 3.5%. This charge comes out of the initial investment contribution, leaving a net investment of $96,500. This cost would only apply to all new monies entering the portfolio. There is then an additional ongoing annual fee called the expense ratio. The expense ratio is embedded in each of the individual fund holdings. The expense ratio can range from a few basis points up to over 2% per year. Advisors are paid a portion of both the sales charge and ongoing expense ratio. Both the actual sales charge and expense ratio depend upon the amount invested and the type / brand of commission-based vehicle chosen. This discussion will be outlined and agreed upon in our recommendation prior to ever investing any monies.