C
clactuary
Member
Hi,
I’m a little unsure at the treatment of expenses when buying/selling assets for unit pricing.
If a p/h pays a premium on an offer basis they will be charged the appropriation price (and potentially some initial charge). I understand that the appropriation price is higher than the expropriation price as we are charging the policyholder for the expenses incurred in purchasing the assets. But why should we deduct selling expenses for the expropriation price? Surely if there are still expenses to be paid on selling the assets, the policyholder should be charged for them?
I also don’t really understand what happens when the policyholder comes to sell their units (e.g for surrender) and the fund is on an offer basis, do they get the higher appropriation price (as opposed to expropriation price) because other policyholders buying units are paying them for the expenses of buying their units?
Think I'm getting a little confused - but would appreciate any help.
Thanks in advance
I’m a little unsure at the treatment of expenses when buying/selling assets for unit pricing.
If a p/h pays a premium on an offer basis they will be charged the appropriation price (and potentially some initial charge). I understand that the appropriation price is higher than the expropriation price as we are charging the policyholder for the expenses incurred in purchasing the assets. But why should we deduct selling expenses for the expropriation price? Surely if there are still expenses to be paid on selling the assets, the policyholder should be charged for them?
I also don’t really understand what happens when the policyholder comes to sell their units (e.g for surrender) and the fund is on an offer basis, do they get the higher appropriation price (as opposed to expropriation price) because other policyholders buying units are paying them for the expenses of buying their units?
Think I'm getting a little confused - but would appreciate any help.
Thanks in advance