Certified Financial Planner (CFP) Exam 2026 – 400 Free Practice Questions to Pass the Exam

12b-1 fees are categorized as sales-related compensation because they are fees that mutual funds charge to cover the costs of marketing and selling the fund's shares. These fees are typically taken out of the fund's assets and can be used for various expenses, including advertising and distributor costs, which are directly linked to the sale of the fund shares.

In the context of a Certified Financial Planner's practice, when they receive compensation through 12b-1 fees, it suggests that they may have a financial incentive tied to recommending certain mutual funds that carry these fees. The receipt of these fees indicates a sales component to the compensation structure because they are associated with the promotion and marketing of investment products rather than just a straightforward salary based on services rendered or investment income. This categorization requires CFP® professionals to disclose the existence and nature of these fees to maintain transparency with clients regarding potential conflicts of interest.