Breakpoint

A breakpoint is the asset level at which a lower fee rate begins to apply under a tiered schedule.

Breakpoints can be applied two ways and the difference is material. Under a tiered calculation each band of assets is charged at its own rate; under a cliff calculation the entire balance is charged at the rate for the band it lands in. The same schedule and the same balance can produce meaningfully different invoices.

Whichever a firm uses, the client agreement and the billing system must agree on it.