A 12b-1 fee is an annual charge paid out of a mutual fund's assets to cover marketing and selling the fund, including paying the brokers who sell it.
The fee takes its name from the SEC rule that allows it: a fund can pay it from fund assets only if it has adopted a written "12b-1 plan." It typically applies to mutual funds, not ETFs. Because it comes out of the fund, you never get a bill; it's part of the expense ratio and lowers your return.
FINRA caps what its member brokers can sell: the asset-based sales charge can't exceed 0.75% a year and the service fee can't exceed 0.25% a year, so up to 1% a year in total. A broker can't call a fund "no load" if its sales and service fees together are more than 0.25% a year.
A fee-only advisor doesn't receive 12b-1 fees. If someone recommending funds to you does, their firm's brochure has to say so.
How to check
Find the line "Distribution and/or service (12b-1) fees" in the fee table at the front of the fund's prospectus. For an advisor, Item 5.E of the firm's Form ADV Part 2A brochure says whether anyone at the firm accepts these fees.
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