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My broker charges me a $19.99 transaction fee when purchasing some mutual funds. I believe that they will also charge this fee when selling shares in the fund. What is not clear to me, is if they charge this fee when purchasing additional shares in the same fund. For example, if I purchase 100 shares and pay the transaction fee, and then decide to purchase an additional 100 shares of the same fund, will I have to pay the fee again?

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If your broker charges a transaction fee, it is likely that the fee is charged per transaction and so since the additional purchase is a different transaction, you will be charged the fee again. If you decide to purchase the additional shares on the same day as the first purchase, and the mutual fund is not an exchange-traded fund (ETF), then as far as the mutual fund is concerned, you will have purchased 200 shares at the closing price that day, and the brokerage may well have sent in a single purchase order for 200 shares before the end of the trading day to the mutual fund, but you will have paid $39.96 for the transactions. All this is in addition to the fund's sales charge (load), if any, which will be paid to the brokerage directly as a sales commission.

You have not indicated which country you are doing these transactions in, but in the US, if your broker is charging you a fee to buy a load fund, you should seriously consider getting a different broker. If your broker is charging you $19.99 to buy a mutual fund, consider buying the mutual fund directly from the fund's web site. Most mutual fund websites are arranged to make such purchases easy to transact, and if you are using a money-management program such as Quicken, it is as easy to keep track of multiple mutual funds accounts with different companies as well as brokerage accounts on your PC as it is to have everything displayed to you on a single page in your browser window when you open your account page on your brokerage's web site. If your broker charges $19.99 transaction fees, consider whether the services (and advice and recommendations) that you are getting from your broker are worth it, and whether you might be better off moving your investments to any one of several discount brokers where you might pay just $7.99 or $4.99 per trade but get a lower level of service.

Moral (for the US and possibly for other countries as well): If your broker charges transaction fees, buy stocks and bonds etc through your broker but whenever possible, buy shares in mutual funds directly from the funds themselves.

Edit: One additional point to look out for is whether transaction fees are charged for re-investment of distributions from mutual funds. I have read only a few of the prospectuses for load mutual funds, but they all waived the load for reinvestment of distributions. A brokerage may well take the viewpoint though, that there were in fact two transactions that occurred -- the brokerage collected the distributions in cash from the mutual fund and then, in accordance with your standing instructions, invested the proceeds into the mutual funds -- and thus collect two transaction fees from you. Read your agreement with the brokerage carefully.

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