Costs and Fees Associated with Investments
Chapters in this video
- 0:00 Markups, markdowns, and commissions by role
- 1:53 The 5% policy guideline and its exemptions
- 3:02 Net transactions and Class A, B, C shares
- 4:01 Breakpoints, breakpoint selling, and the 13-month LOI
- 4:59 12b-1 fees and the no-load 0.25% ceiling
- 5:25 Variable annuity fees and the IRA suitability trap
- 6:19 Reverse churning and soft dollar safe harbor
- 7:51 Rapid-fire exam recap
What this video covers
- The difference between a markup (principal transaction) and a commission (agency transaction), and when a markdown applies
- Why the 5% policy is a guideline and not a hard cap, plus the exempt categories: mutual funds, variable annuities, municipal securities, and new issues
- Class A, B, and C mutual fund share classes, and which holding period each one actually fits
- Breakpoints, breakpoint selling violations, and the 13-month Letter of Intent (LOI) window
- The 1.00% maximum on 12b-1 fees and the 0.25% ceiling required to call a fund "no load"
- Why variable annuities are generally unsuitable inside an Individual Retirement Account (IRA), and the 10% penalty-free withdrawal allowance during the surrender period
- Reverse churning on flat-fee accounts, and the soft dollar safe harbor for research versus the items that fall outside it
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