Placement fees are charges that are assessed for services rendered in a number of business applications. This concept is found in situations where brokers handle investments for clients, as well as when a new hire is placed with the aid of an employment agency. Fees of this type may be paid by a client, or in cases of employment placement, by the new hire.
With investing activity, the placement fee is usually defined as the charges incurred by the investor during the process of the purchase or sale of shares of stock, bonds, commodities, and other forms of investment. The fee is normally assessed by the broker who handles the financial transactions, and may be calculated as a percentage of the total worth of the transaction. In other cases, the placement fee is a set fee that the brokerage charges for each transaction conducted on behalf of a client.
Different nations have laws that govern how and when a broker can apply a placement fee to an investor account. In some cases, the fee is charged immediately and is due at that time. At other times, the fee may be assessed and be payable within the next thirty days. Investors sometimes arrange for the brokers to automatically deduct the placement fee from an existing account, usually on the business day that the investment transaction is completed.
When used in a process focused on employment, the fee for placement usually has to do with a payment rendered to an employment agency. The exact provisions of the placement agency fee vary, depending on regulations that define the scope of charges of this type. In some nations, an employment agency can charge what is known as a contingency placement fee. This is a charge that essentially guarantees the agency a portion of the payment up front, with the remainder due after the employee remains in the secured position for a specific period of time, usually three months.
There are other situations in which the idea of a placement fee is common. The term is sometimes employed in real estate deals, as well as in situations where corporate headhunters locate executives to fill open positions within a company. In general, whenever a contracted agency or individual seeks to secure goods or services for a client, some sort of placement fee is included in the overall charges related to the transaction.