Letter of intent
Certified Financial Planner glossary · Certified Financial Planner
Definition
A commitment to reach a mutual fund breakpoint within thirteen months in exchange for immediate reduced pricing.
Letter of intent in plain English
A client is $8,000 short of a mutual fund breakpoint and hates paying the higher load today. Letter of intent is a commitment to reach that breakpoint within thirteen months in exchange for immediate reduced pricing. Miss the commitment and the fund can claw back the discount. It is a breakpoint timing tool, not a rights of accumulation history credit and not a promise about future performance. Trade a thirteen-month purchase pledge for today's lower sales charge and you are looking at a letter of intent.
Related Certified Financial Planner terms
Certified Financial Planner practice questions · Certified Financial Planner flashcards · Certified Financial Planner study guide