Rights of Accumulation (ROA): Aggregating Family Accounts for Mutual Fund Breakpoints
A customer who currently owns $65,000 of Class A mutual fund shares in an individual account wishes to purchase $40,000 of Class A shares of the same fund family for their spouse's Roth IRA. The fund family offers a breakpoint at $100,000. Under Rights of Accumulation (ROA) rules, does this new purchase qualify for the $100,000 breakpoint?
Rights of Accumulation (ROA) allow aggregating existing holdings across spouses and minor children within the same fund family to achieve breakpoint discounts on new purchases.
Complete Analysis & Legal Rationale
Under Rights of Accumulation (ROA), mutual fund investors receive sales charge discounts on new share purchases by combining the value of their prior fund investments with the new purchase. Importantly, fund families permit combining accounts across immediate family members: individual accounts, joint accounts, spouse IRAs, and UGMA/UTMA custodial accounts for minor children. Here, existing $65,000 + new $40,000 = $105,000, which exceeds the $100,000 threshold, allowing the new $40,000 to be purchased at the lower sales charge.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Rights of Accumulation (ROA) allow aggregating existing holdings across spouses and minor children within the same fund family to achieve breakpoint discounts on new purchases.
Fails to adhere to packaged product rules for B.
Fails to adhere to packaged product rules for C.
Fails to adhere to packaged product rules for D.
Official Standard: Under Rights of Accumulation (ROA), mutual fund investors receive sales charge discounts on new share purchases by combining the value of their prior