Gross Dealer Concession or GDC is the revenue to a brokerage firm when commissioned securities and insurance

Insurance

In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...

 salespeople sell a product, whether it is an investment like stock

Stock

The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...

s, bonds, or mutual funds, or insurance like life insurance

Life insurance

Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...

 or long term care insurance

Long term care insurance

Long-term care insurance , an insurance product sold in the United States, United Kingdom and Canada, helps provide for the cost of long-term care beyond a predetermined period...

. The commission

Commission (remuneration)

The payment of commission as remuneration for services rendered or products sold is a common way to reward sales people. Payments often will be calculated on the basis of a percentage of the goods sold...

 that the agent receives is usually a percentage of this figure, although some firms like Merrill Lynch

Merrill Lynch

Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...

use figures called Production Credits, usually smaller than GDC, to determine payouts and retain more revenue.

For example, a mutual fund with a 5.75% sales charge is sold to someone who invests $10,000. $575 GDC is created by the sale, and the investor has an initial account balance of $9425. If the sales agent receives 32% of the GDC, he makes $184. If the payout is based on Production Credits or PCs, it would perhaps be about 5.5% of the total sale, or 32% of 550: $176.