LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A client's retirement target requires a return well above what her stated risk tolerance can support. The agent should:
- present the conflict and discuss saving more, retiring later or accepting a smaller goal
- Brecommend the aggressive funds needed to reach the target, since the goal comes first
- Cguarantee the required return by selecting the highest available guarantee level on the contract
- Drecord a higher risk tolerance in the file so that the recommendation becomes suitable
Correct answer: A) present the conflict and discuss saving more, retiring later or accepting a smaller goal
Where the required return and the acceptable risk cannot both be met, something must change. The agent's job is to set out the levers honestly, let the client choose and document the decision that follows.
Why the other options are wrong
- BChasing the target beyond her tolerance is precisely what an unsuitable sale looks like.
- CGuarantees protect deposits at set dates; they do not manufacture a required return.
- DAdjusting the recorded profile to fit a product is falsification of the file.
Exam tip
When goal and tolerance conflict, change the goal, the timeline or the savings rate.
Common mistake
Raising the recorded risk tolerance so that an unsuitable recommendation appears to fit.
What this tests
CISRO competency component 3.1 — Implement a recommendation adapted to the client's needs and situation — which is weighted at 25% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 3
- A client's spouse must sign for:
- When the insurer requests additional information after the application (for example, source of wealth for a large deposit), the agent should:
- The implementation of a recommendation involving a switch from one seg fund to another within a contract requires:
- A client wishes to designate a charity as beneficiary of a segregated fund. Implementation should:
- For a deferred annuity implemented for a client, the agent should confirm:
- The agent's record of the implementation should be retained:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.