LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A client mentions that she is going through a divorce. The profiling implication is:
- ANone, since a marital breakdown is a legal matter that does not change the investment profile
- Assets may be divided, objectives may change, designations need review, and decisions may be deferred
- CThat she should invest aggressively, since she will need growth to rebuild after the settlement
- DThat she must cash out everything, since the court will require liquid assets for division
Correct answer: B) Assets may be divided, objectives may change, designations need review, and decisions may be deferred
Life events reshape the situation. Prudence suggests stabilizing before committing to long-horizon or locked-in products.
Why the other options are wrong
- ADivorce affects assets, objectives and beneficiaries directly.
- CUncertainty argues for caution, not aggression.
- DCashing out may be harmful and is not required for division.
Exam tip
Divorce: revisit assets, cash flow, beneficiaries; defer lock-ins.
Common mistake
Leaving a former spouse as the seg fund beneficiary.
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.