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Letter Of Intent (LOI)
Also called an LOI, a letter of intent is a paper signed by an investor who's buying shares in a front-loaded mutual fund. The LOI gives the investor a chance to get a lower sales charge (see sales load) immediately, even if the investor hasn't bought enough shares to qualify for the lower sales charge.
The LOI is basically the investor saying, "I'm going to buy more shares in the future, so I'd like to pay the smaller sales charge now, as though I had already bought the extra shares." If the investor doesn't end up buying more, the mutual fund company is potentially losing money. So what they usually do is hold some shares of the fund in escrow.
If the investor does buy more shares, those shares in escrow go to the investor. If not, the mutual fund company sells the shares and gets the money they wanted to get from the investor in the first place.