LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A client's TFSA contribution room and RRSP deduction room are part of the profile because:
- They determine how much can be sheltered and in which plan, affecting tax efficiency
- BThey are not relevant, since a segregated fund can be held outside any registered plan
- CThey set the guarantee level, since registered contracts carry a higher guarantee than non-registered ones
- DThey limit fund choice, since only certain funds are eligible to be held inside an RRSP or TFSA
Correct answer: A) They determine how much can be sheltered and in which plan, affecting tax efficiency
Available registered room is a tax fact that shapes where to place an investment.
Why the other options are wrong
- BRoom is a core tax input; ignoring it wastes shelter.
- CGuarantees are contractual and identical inside or outside a registered plan.
- DMost funds can be held in any plan type.
Exam tip
Check TFSA and RRSP room before recommending non-registered.
Common mistake
Recommending a non-registered contract when registered room is unused.
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.