Investment Company Share Practices

What this video covers

• The 0.25% hard limit on 12b-1 fees and service fees for a fund to legally use the "no-load" label, and why zero front-end load does not save a fund that exceeds it
• Why agents must proactively disclose breakpoint discounts and letters of intent (LOI), and why waiting for the customer to ask is itself a dishonest practice
• How share class suitability works, and why recommending Class B shares with contingent deferred sales charges (CDSCs) when a customer qualifies for a Class A breakpoint is unsuitable
• What constitutes improper switching: liquidating and repurchasing shares in a different portfolio with similar objectives primarily to generate new sales charges
• The rules against misleading yield claims, bank-deposit comparisons, and implying guarantees without disclosing all investment risks
• Why ex-dividend date hype and mislabeling long-term capital gains distributions as income yield are prohibited
• Why prospectus delivery alone does not satisfy the broker-dealer (BD) and agent's independent disclosure obligations for sales charges, breakpoints, and suitability