LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A client asks the agent to guess her risk tolerance so she can 'skip the questionnaire'. The agent should:
- ASkip it, since an experienced agent can judge a client's tolerance from conversation alone
- BMake a reasonable estimate and record it, since the client has consented to that approach
- CMark 'aggressive', since a client who dislikes questionnaires is unlikely to be risk-averse
- Explain that the questionnaire protects her and complete it with her
Correct answer: D) Explain that the questionnaire protects her and complete it with her
KYC cannot be delegated to guesswork. The process is required and serves the client.
Why the other options are wrong
- ASkipping the assessment is a breach of the know-your-client duty.
- BGuessing is not know-your-client; tolerance must be assessed and documented.
- CMarking 'aggressive' without assessment falsifies the profile.
Exam tip
Complete KYC properly, every time.
Common mistake
Letting clients skip the risk questionnaire.
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.