When selling shares of an investment company to a client, an agent must provide the client with
I. the fund’s prospectus, which provides information on any loads or other fees as well as historical return information.
II. information about any breakpoints if it is a load fund along with an explanation of a letter of intent
III. information regarding the investment adviser used by the fund
IV. an explanation of the various loads and fees outlined in the fund’s prospectus
Explanation
Answer: D - When selling shares of an investment company to a client, the agent must provide the client with the fund’s prospectus and provide the client with an explanation of the various loads and fees and any breakpoints that, if reached, will result in a lower load charge for the client, along with information on a letter of intent, which the client can execute. The agent need not provide any information regarding the investment adviser used by the fund although that information is contained in the prospectus as well.
