Sales Charges, Breakpoints, and 12b-1 Fees

What this video covers

• The FINRA investment-company sales-charge rule: what earns a fund the 8.5% cap versus the lower caps at 8.0%, 7.75%, or 7.25%
• Why dividend reinvestment at net asset value (NAV) and letters of intent (LOI) are not conditions of the 8.5% ceiling, and how exam writers use both as bait
• How Class A, Class B, and Class C shares differ in front-end load, contingent deferred sales charge (CDSC), ongoing 12b-1 fees, and conversion behavior
• The breakpoint-sale prohibition: why a rep must inform a customer who is close to a breakpoint, and why the violation exists even without a customer complaint
• How rights of accumulation (ROA) pool holdings across family members and accounts within the same fund family, and why cross-family pooling fails
• The letter of intent mechanics: 13-month forward commitment, backdated up to 90 days, and why 12 months is an exam trap
• The 12b-1 fee caps: 0.75% distribution plus 0.25% service for 1.00% total, and why 0.25% is the no-load fund dividing line
• Who approves and renews the distribution-and-service-fee plan: the board of directors adopts it, but independent directors renew it annually