Letter of Intent (LOI)
Chapters in this video
- 0:00 The coffee shop analogy: upfront bulk discount
- 1:12 Formal definition: non-binding 13-month pledge
- 1:45 Ivy's $50,000 pledge and the 4.50% rate drop
- 2:15 The two numbers to burn into your brain: 13 and 90
- 3:22 What happens when Ivy only invests $30,000
- 4:23 Exam trap gauntlet: active recall questions
- 5:52 Rapid-fire exam recap
What this video covers
- How a letter of intent (LOI) lets an investor get reduced sales charges immediately based on a future investment pledge
- Why the LOI duration is exactly 13 months and how the 90-day backdating rule captures prior purchases
- What "non-binding" actually means: the investor can walk away but loses the reduced sales charge
- How escrowed shares protect the fund, not the investor, and serve as collateral for unearned discounts
- The step-by-step consequence of an unfulfilled LOI: retroactive application of the higher sales charge from escrowed shares
- Why the 13-month clock starts from the LOI date or backdated date, not from the first purchase date
- How to distinguish LOI mechanics from rights of accumulation and other breakpoint strategies
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.