A brokerage firm sells a client an amount just below a fund's breakpoint to earn a bigger commission. How does this stand?

1. Breakpoints are the investment levels at which a fund reduces its front-end sales load. 2. The SEC does not require a fund to offer breakpoints at all. 3. But where a fund does offer them, it must disclose them and brokers must apply them. 4. A brokerage firm is not allowed to sell an amount just below a breakpoint simply to earn a higher commission. 5. Client consent does not cure it, because the prohibition sits on the firm's conduct. 6. Each fund company setting its own breakpoint formula is true, and is a reason to ask about the levels, not a defence. 7. A fund with no front-end load has no breakpoints to sell beneath, so that condition does not arise. _Source: US SEC Office of Investor Education and Advocacy, "Mutual Funds and ETFs: A Guide for Investors", section A Word about Breakpoints_