What is a primary reason for signing a Letter of Intent (LOI)?

The primary reason for signing a Letter of Intent (LOI) in the context of mutual funds and securities is to qualify for breakpoints. Breakpoints refer to discounts on the sales charge of mutual fund shares, which are based on the amount of the investment. When an investor signs an LOI, it indicates their intention to invest a specific amount over a designated period, which can help them achieve a higher investment threshold that qualifies for these discounts. This mechanism encourages larger investments and aids investors in lowering their costs through reduced sales charges.

While other options mention aspects that could be related to investment decisions, none capture the specific purpose of an LOI in the same manner as qualifying for breakpoints does. The LOI does not establish a formal agreement in a legally binding sense; rather, it serves as an indication of intent. It also does not guarantee higher returns or delay investment decisions. Therefore, the reason for signing an LOI primarily revolves around achieving cost benefits through qualifying for breakpoints.