Costs and Fees Associated with Investments
Chapters in this video
- 0:00 Transaction charges: markup, commission, and net transactions
- 2:08 Mutual fund share classes and the 8.5% sales charge ceiling
- 4:15 Non-discretionary fee-based accounts and reverse churning
- 5:12 Variable annuity surrender charges and the 1035 exchange trap
- 6:18 M&E charges, subaccount expense ratios, and stacking costs
- 6:42 12b-1 fees, no-load thresholds, and soft dollar arrangements
- 8:12 Rapid-fire exam recap
What this video covers
- The difference between markup (principal transaction), commission (agency transaction), and net transaction, plus the critical confirmation-labeling requirement
- How Class A, B, C, and no-load mutual fund shares differ on front-end loads, CDSCs, conversion features, and typical suitability
- The 8.5% maximum aggregate sales charge ceiling and how it steps down when breakpoints, rights of accumulation, or service fees are missing
- Why putting a low-activity buy-and-hold customer into a non-discretionary fee-based account is reverse churning, an enforcement violation
- How variable annuity surrender charges decline over time, why a 1035 exchange resets the surrender clock to year zero, and when written supervisor justification is required
- What the Mortality and Expense (M&E) charge covers versus the subaccount expense ratio, and that these costs stack rather than substitute
- The 1.00% annual cap on 12b-1 fees, the 0.25% threshold that kills the no-load label, and where soft dollar arrangements must be disclosed
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