Accounting for bonus units for a switch cost comparison
Was wondering what your approach was for comparing costs where bonus units are involved.
E.G. A pension has an ongoing charge of 1% but has bonus units equivalent to 0.52% p.a which are added to the plan on a monthly basis.
Would you say that the charge is effectively 0.48% net or would you say that the plan has a charge of 1% and the bonus units are a guarantee that the client will be giving up?
Thanks in advance