Bank commissions lead mutual fund distribution; wealth managers earn most

When you invest in a mutual fund, a small part of your money goes to paying the people who helped sell the fund.

This money is taken out before you get your share of the profits.

Big banks earn the most from this because they have many customers and lots of branches.

Wealth managers and corporate distributors earn the largest total amount, getting more than 42% of all the money paid.

Fintech apps that let you invest on your phone earn less than banks but more than individual advisors.

Individual advisors who work alone earn much less, and very small advisors earn just a tiny amount.

How much someone earns depends on how much money they manage — the more money they look after, the more they are paid.

Experts say this is about size, not rules, since commissions are tied to the money managed.

The report suggests investors ask how their advisor is paid and check whether a cheaper direct plan is available.

Both commission-based distributors and fee-based advisers are regulated and transparent.