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Definition of 'Breakpoint Sale'
The sale of a mutual fund at a set dollar amount that allows the fundholder to move into a lower sales charge bracket. If, at the time of investment, an investor is unable to come up with the funds needed to qualify for the lower fee, he or she can sign a letter of intent promising to reach the total amount, or breakpoint, in a set time period.
Any sales that occur just below a breakpoint are considered unethical and in violation of FINRA (formerly the NASD) rules.
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Investopedia explains 'Breakpoint Sale'
An example of a breakpoint sale would be when an investor plans to invest $95,000 in a front-load mutual fund and faces a charge of 6.25% or $6,125. If the investor is properly advised, he or she will be told that adding $5,000 for a total investment of $100,00 will qualify the sale fro a lower sales charge of 5.5%, or $5,500. This means that the investor will essentially have $5,625 more invested than the initial purchase plan due to the savings in sales charges.
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Search results for 'Breakpoint Sale'
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http://www.investopedia.com/articles/02/120502.asp
... A breakpoint sale would occur if you invest at $25,000 because at this
amount your investment is in a lower sales-charge bracket. ...
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http://www.investopedia.com/exam-guide/series-26/sales/prohibited-practices.asp
In this section fraudulent interstate transactions, unlawful representations,
restrictions on the purchase and sale of IPOs and avoiding breakpoint sales. ...
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http://www.investopedia.com/exam-guide/series-7/packaged-securities/mutual-fund-fee-breakpoint.asp
... before the market close, the client will not know the sale price until ... reduced sales
charges when the amount held equals a rights of accumulation breakpoint. ...
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http://www.investopedia.com/exam-guide/series-26/sales/finra-conduct-rule-2830.asp
... any price other than a public offering price unless such sale is in ... However, if specific
breakpoint discounts are not met, the maximum aggregate sales charge ...
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http://www.investopedia.com/exam-guide/finra-series-6/finra-rules/finra-conduct-rule-2830-investment-company-securities.asp
... price other than a public offering price unless such a sale complies with ... If specific
breakpoint discounts are not met, the maximum aggregate sales charge will ...
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http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/marginal-cost-of-capital.asp
... Of Capital Vs. Operating Leases; 9.18 Determining The Value Of The Lease
And The Lease Asset; 9.19 Sale And Leaseback; 9.20 Types Of ...
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http://stocks.investopedia.com/stock-analysis/2010/Should-Investors-Take-A-Chance-On-Savient-SVNT-NVS-BMY-PFE-MRK1026.aspx
... That made the decision to seek a sale of the company a quite rational decision ...
earn-outs in future years if the drug's sales reached certain breakpoint targets ...
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http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/factors-affecting-cost-of-capital.asp
... Of Capital Vs. Operating Leases; 9.18 Determining The Value Of The Lease
And The Lease Asset; 9.19 Sale And Leaseback; 9.20 Types Of ...
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http://www.investopedia.com/exam-guide/series-7/securities-markets/prohibited-activities.asp
... may make a buy recommendation, but the firm initiates a sale of its ... Switching and
Breakpoint Sales for Mutual Funds (NASD Rule 2830): Switching: trading mutual ...
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