Breakpoint Sales
Chapters in this video
- 0:00 The $98,000 Class A trade that triggers the violation
- 1:00 The breakpoint sales prohibition: exact rule language
- 1:36 The math trap: how $2,000 more saves $910 in fees
- 2:26 Why intent does not matter: incompetence equals violation
- 3:12 Class A vs. Class B and Class C share-class disambiguation
- 3:44 Rights of accumulation and combined purchases
- 4:42 Letter of intent: 13 months and the non-binding true-up
- 6:23 The principal's four-step supervisory workflow
- 7:31 Why the written disclosure is a standalone violation
- 8:06 Regulatory overlap: breakpoint rule plus RegBI care obligation
- 9:05 Rapid-fire exam recap
What this video covers
- The breakpoint sales prohibition: what "just below the breakpoint" means and why intent to defraud is not required
- How to calculate the dollar impact of missing a breakpoint tier using front-end load schedules
- Why the rule applies specifically to Class A shares and generally not to Class B (contingent deferred sales charge, or CDSC) or Class C (level load) shares
- Rights of accumulation (ROA): how existing fund-family holdings count toward current purchase breakpoints
- Combined purchases: household and family-account aggregation rules that can push a customer over a breakpoint
- Letter of intent (LOI): the 13-month commitment mechanics, the true-up if the customer falls short, and why it is not a binding contract
- The principal's required supervisory system: training, written disclosure, automated ticket-flagging, and documentation as a shield against failure-to-supervise liability
- Why missing a breakpoint check is a dual violation of both the breakpoint sales rule and the Regulation Best Interest (RegBI) care obligation
Read the full lesson, free
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