LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A 68-year-old widow with modest savings and a need for predictable income has a profile pointing toward:
- AA 15-year growth strategy, since she may live another twenty years and needs the portfolio to keep pace
- Income and safety objectives, low risk tolerance, and annuities or conservative funds
- CSpeculative investments, since modest savings need high returns to produce a meaningful income
- DAggressive equity funds, since the death guarantee protects her estate against any losses
Correct answer: B) Income and safety objectives, low risk tolerance, and annuities or conservative funds
Age, dependence on savings and income needs shape the profile. Annuities and conservative funds match income and safety objectives.
Why the other options are wrong
- AHer horizon and income need are shorter-term than a growth strategy assumes.
- CSpeculation is unsuitable for a client who depends on the money.
- DVolatility threatens her income; the death guarantee does nothing for her while alive.
Exam tip
Retirees dependent on savings: income + safety, low risk.
Common mistake
Treating a retiree's whole portfolio as long-horizon growth.
What this tests
CISRO competency component 1.1 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.