TYPES OF SALES CHARGES

Question 1

FEL (front end load)
if client needs funds for emergency purposes always choose FEL

Answer 1

initial sales charge deducted then rest of clients $ is invested-
if FEL equals 2% and 10k from client- 200$ is taken off and 9800 gets invested- next day client wants their $ back but MV=9500-
client ALWAYS gets back MV+200$ FEL

Question 2

DSC (deferred sales charge)

Answer 2

no initial charges (Insurance company pays agent) but if client decides to withdraw $ within first 7yrs they will get charged

Question 3

Right of rescission (RR)

Answer 3

client has a 2 DAY free look period where they can cancel and get all their money back if they change their mind about the policy

Question 4

NO-LOAD

Answer 4

no charges for initial investment but MER fees still apply

Question 5

Management expense ratio (MER)

Answer 5

fees charged to client for managers from handling perks in investment (higher in SEG funds)