Breakpoints
Chapters in this video
- 0:00 Bulk pricing: the warehouse-club analogy for breakpoints
- 1:57 Three golden rules and the Class A exclusivity trap
- 3:00 How the breakpoint schedule cascades with bigger investments
- 4:12 Why the load drops to zero at $1 million
- 4:59 The breakpoint sale: Riley's $49,500 dilemma
- 6:08 Rapid-fire exam recap
What this video covers
- Why breakpoints apply only to Class A shares and never to Class B or C shares, and how the test baits you with wrong share-class answers
- How each mutual fund sets its own breakpoint schedule disclosed in the prospectus, with no universal industry standard
- Why breakpoints reduce the sales-charge percentage rather than subtracting a flat dollar amount
- What happens to the front-end load at the $1,000,000 tier and the economics behind waiving it to zero
- What a breakpoint sale is: selling shares just below a breakpoint without disclosing the discount opportunity
- Why a breakpoint sale is a violation by the registered representative, not the investor, and why intent is irrelevant even for honest mistakes
- The representative's disclosure duty when a customer invests just below a breakpoint, such as $49,500 versus $50,000
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete SIE course in the app is free too, including adaptive practice questions and spaced-repetition flashcards.