LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A client's employment status (employee with pension versus self-employed without one) affects the profile because:
- A defined benefit pension may allow more risk; no pension calls for more guaranteed elements
- BSelf-employed clients must buy annuities, since the law requires them to replace the pension they lack
- CEmployees with a pension cannot invest, since their pension adjustment eliminates all registered room
- DIt does not matter, since the profile depends on the client's attitude rather than on employment
Correct answer: A) A defined benefit pension may allow more risk; no pension calls for more guaranteed elements
Other sources of retirement income change the role of personal investments. The curriculum lists assessing existing coverage, including pensions.
Why the other options are wrong
- BAnnuities are one option for the self-employed, not a requirement.
- CEmployees invest routinely; the pension adjustment reduces room but rarely eliminates it.
- DPension status is a major factor in capacity for risk.
Exam tip
Guaranteed pension income → more capacity for risk elsewhere.
Common mistake
Ignoring a client's pension when profiling.
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.