LLQP Segregated Funds & Annuities · Component 1.3 · 35% of the exam
A client's need to fund a child's education in 12 years suggests:
- An RESP to capture grants, invested with a horizon-matched mix
- BNothing specific, since twelve years is long enough to fund education from future income
- CA LIRA in the child's name, since locked-in money cannot be spent on anything else
- DA life annuity on the child, since guaranteed payments will cover tuition when it falls due
Correct answer: A) An RESP to capture grants, invested with a horizon-matched mix
Education needs have a defined date and benefit from grants. Glide-path investing suits them.
Why the other options are wrong
- BThe need is concrete and fundable with grants that would otherwise be lost.
- CLIRAs hold pension money only.
- DAnnuities are for lifetime income, not a twelve-year goal.
Exam tip
Education need → RESP with grants, glide-path mix.
Common mistake
Leaving RESP money in equities the year before university.
What this tests
CISRO competency component 1.3 — 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.