Originally Posted by growerVon
G8tr, I keep going back to this issue, too. I dug into the company's literature and there is a clause that family can qualify to avoid the front-end load. So it is possible the load isn't being applied and Mom didn't answer correctly because she either didn't know or remember... would be great, for me, if the load weren't being applied.
I'm bringing up American Funds again because I'm familiar with them, but you can get a lower fee if you have lot of money invested with them (total of all the funds in the American Funds family). The 5.75% front-end fee applies if you have less than $25K invested. It reduces gradually; for example if you have between $100K and $250K invested, you pay 3.5%. That's true whether you reach that bracket by investing new money or appreciation on what you have in there already. At $1 million and over there's no front-end load.
My parents asked me about this because my nephew and his wife wanted to open an account for their twin girls and the FA told them they could get that break based on what family members had in American Funds. They asked me about it. It turned out the 529 would have to have been in my name. I don't think they liked that idea (I would have been free to decide that my granddaughter was cuter and smarter than both of their kids put together and spend it on her college instead
) because I never heard about it again.
Is it possible our mother has $1 million of her own in American Funds? If so, maybe you were able to invest with zero front-end fees. I'd still focus on the overall return, though. Who cares if you're paying zero front-end load but annual returns are bad?