# Breakpoint

> A breakpoint is the investment amount at which a lower rate applies, either to a mutual fund's sales load or to an advisor's percentage fee.

Canonical page: https://find.wellspent.co/glossary/breakpoint/
Also called: breakpoint discount, fee breakpoint

For mutual funds, the SEC gives this example: a 5.75% front-end load on purchases up to $50,000, dropping to 4.50% between $50,000 and $99,999, and lower again above that. Funds don't have to offer breakpoints, but if they do they must disclose them and brokers must apply them. A broker can't sell you an amount just under a breakpoint to earn a higher commission.

Funds decide what counts toward a breakpoint. Some combine a household's accounts, including retirement and college savings accounts (often called rights of accumulation). Some let you sign a letter of intent to buy more later and get the lower rate now, with the discount clawed back if you don't follow through.

Advisors use the same word for fee tiers: for example, 1% on the first $1 million and less on the amount above it. On larger balances these tiers can matter more than the headline rate.

## How to check

For a fund, the prospectus lists the breakpoints and what accounts count; tell your broker about all of your household's holdings. For an advisor, the fee schedule and any tiers are in Item 5 of the firm's Form ADV Part 2A brochure.

## Sources

- [Investor.gov (SEC), Breakpoint Discounts or Sales Charge Discounts (checked October 31, 2026)](https://www.investor.gov/introduction-investing/investing-basics/glossary/breakpoint-discounts)
- [SEC, Form ADV Part 2 instructions, Item 5.A (SEC 1707, 08-22)](https://www.sec.gov/about/forms/formadv-part2.pdf)

## Related terms

- [Sales load](https://find.wellspent.co/glossary/sales-load.md)
- [Assets under management (AUM) fee](https://find.wellspent.co/glossary/aum-fee.md)
- [Form ADV](https://find.wellspent.co/glossary/form-adv.md)