The SEC and FINRA are concerned that many Series 6 reps do not carefully monitor their customers' holdings of mutual funds, with the result that, in some cases, customers fail to obtain discounts on front-end sales loads for new purchases of shares.
Shares of the same mutual fund or those of mutual funds in the same family should be taken into account when a person initiates a new purchase of shares, because most funds allow a substantial sales charge discount when a person purchases new shares. A Series 6 rep should consider other accounts of his customers, such as IRA accounts, joint accounts, 529 Plan accounts, and/or trust accounts, and see if these accounts contain shares of the same fund or same family. All these shares could very well count towards earning a reduced sales charge.
Furthermore, a sponsor of a mutual fund family may also sponsor variable annuities. Purchase of these annuities usually can also be aggregated with purchases of new shares to arrive at a point where the sales charge drops.
If the SEC and FINRA are concerned about the lack of diligence on the part of mutual fund reps in awarding reduced sales charges, it is a good bet that the Series 6 Exam will contain questions on this very subject.
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