Rights of Accumulation


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Rights of Accumulation

In loaded mutual funds, the right of a shareholder to a reduced load or sales fee when he/she purchases more than a certain a dollar amount of the mutual fund. The dollar amount is known as the breakpoint. For example, if the breakpoint for a certain mutual fund is $50,000, an investor has the right to reduce the load by, say, half when he/she invests more than $50,000 in the fund. It thus becomes advantageous for the investor to invest $50,000 instead of, say, $45,000, because this will entitle him/her to half the load for the entire investment, and not just for the amount invested past $50,000. Mutual funds that allow investors to buy at just below the breakpoint may run afoul of Financial Industry Regulatory Authority regulations. The right of accumulation is not limited to a single investment; an investor putting two tranches of $25,000 into the above mutual fund will usually find his excess load refunded.
References in periodicals archive ?
As a result of recent and ongoing examinations, NASD and Securities and Exchange Commission (SEC) staff are concerned that some member firms have not been charging investors the correct sales loads in many instances, particularly for mutual fund transactions involving letters of intent and rights of accumulation.
Historically, the rights of accumulation issue has been a complex and difficult one for advisors to discuss with clients, because of the breadth of information involved," Mansueto said.
ADP's new Rights of Accumulation functionality provides an automated mechanism for aggregating customer assets, both held at the firm and elsewhere, to ensure that the proper sales charge is applied.
Fund conversion files - that establish direct accounts held at the fund, including changes to branch and rep, name and address, as well as social security and Rights of Accumulation numbers.
And BreakPointer's benefits extend well beyond breakpoint tables to include other relevant rules, including Letter of Intent, Rights of Accumulation and other rules governing assets owned by family members or options to purchase shares at no load.
The addition of an insurance wrap to the Manulife Stable Principal Portfolio, systematic exchanges among portfolios, and breakpoints and Rights of Accumulation (ROA) within the A-share class is indicative of Manulife College Savings' efforts to continue to offer a competitive 529 plan that can effectively meet clients' needs.
Called American Legacy III Plus Variable Annuity, the product provides a rights of accumulation feature, the first offered in a bonus product.