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Definition of 'Commission'

A commission is a fee paid to a broker, agent, or other intermediary for their services in facilitating a transaction. Commissions are typically calculated as a percentage of the sale price of the asset being sold. For example, a real estate agent might earn a commission of 6% of the sale price of a house.

Commissions are common in the financial services industry, where brokers and agents are paid to help clients buy and sell stocks, bonds, and other investments. Commissions can also be charged for other services, such as insurance sales and financial planning.

The amount of commission charged can vary depending on the type of transaction, the complexity of the transaction, and the experience of the intermediary. In some cases, commissions may be negotiable.

Commissions are an important source of income for financial professionals. However, they can also be a significant cost for consumers. It is important to be aware of the commissions that you are being charged when you make a financial transaction.

Here are some additional things to know about commissions:

* Commissions are typically paid by the seller of the asset, not the buyer.
* Commissions can be paid in cash or in the form of shares of the asset being sold.
* Commissions are often subject to taxation.
* Commissions can be a significant expense, so it is important to compare the commissions charged by different financial professionals before making a decision.

If you have any questions about commissions, be sure to ask your financial advisor.

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