Rebates (upfront payments) and trailer fees (ongoing percentage of AUM) are common compensation mechanisms in fund distribution. They remunerate advisors for marketing the product, conducting due diligence and providing ongoing client service. From a manager’s perspective, offering competitive but transparent incentives helps motivate advisors to allocate client capital and maintain those positions over time. It is important, however, to disclose these fees fully to comply with regulations and to avoid conflicts of interest. Platforms that centralize calculation and payment of rebates ensure accurate accounting and reduce administrative burden, allowing managers to focus on performance and relationship building.