Costs and Fees Associated with Investments

What this video covers

• The difference between a principal transaction (markup or markdown from inventory) and an agency transaction (commission as middleman), plus when a net transaction requires written consent
• The FINRA 5% policy: why it is a guideline not a hard cap, the five fairness factors, and which four products are completely exempt
• How Class A, B, and C mutual fund shares differ on front-end loads, contingent deferred sales charges (CDSC), 12b-1 fees, and investor time horizons
• Breakpoint discounts: how letters of intent (LOI) work within 13 months, how rights of accumulation (ROA) use current net asset value (NAV), and why breakpoint selling is a violation
• The 12b-1 fee maximum of 1.00% and the 0.25% threshold that separates no-load funds from load funds
• Why variable annuities are generally unsuitable inside traditional individual retirement accounts (IRAs) due to redundant tax deferral and layered mortality and expense (M&E) charges
• The soft dollar safe harbor: what research services are permissible versus what counts as a violation when broker-dealers reward investment advisers for directing client trades