LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A client's stated objective is to leave the maximum to grandchildren while keeping access during her lifetime. Which profile element is most relevant?
- AEmployment status, since a client who is still working can afford to give more to grandchildren
- BLiquidity only, since the need for access during her lifetime overrides any bequest objective
- CGrowth only, since maximizing the estate means the portfolio must be as aggressive as possible
- Estate objectives with lifetime access, pointing to a segregated fund with a named beneficiary
Correct answer: D) Estate objectives with lifetime access, pointing to a segregated fund with a named beneficiary
The profile must capture both the estate goal and the access need. Segregated funds serve both; annuities sacrifice access.
Why the other options are wrong
- AEmployment is irrelevant to reconciling access with a bequest.
- BLiquidity is one of two objectives here; the bequest is the other.
- CGrowth is secondary to estate transfer and access.
Exam tip
Estate + access → seg fund with beneficiary; not an annuity.
Common mistake
Recommending a life annuity to a client with a bequest objective.
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.