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Performance Incentive

A performance incentive - where the advisor gets paid based on how well your investments perform (the more money you get, the more money the advisor gets) - is typical of hedge funds, which are usually only for sophisticated investors.

Additional Comments:

Performance incentives typically accompany other forms of compensation.

Related Terms:

Hedge Fund
A private investment partnership that can use leverage and derivatives, take both long and short positions, ...

Mutual Funds
Mutual funds are the most common type of pooled investment. Funds "slice and dice" many types of ...

Actively Managed Funds
In most actively managed funds, the fund manager makes specific investments with the goal of outperforming ...

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