LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
A client selects three different funds within one segregated fund contract. The disclosure obligation at implementation is that:
- the client must receive the fund facts for each fund selected, no later than at application
- Bthe information folder alone is sufficient, since the funds share a single contract
- Conly the fund holding the largest share of the deposit requires its own fund facts document
- Ddocuments may be delivered after the contract is issued, provided the client asks for them
Correct answer: A) the client must receive the fund facts for each fund selected, no later than at application
The client needs the key information for every fund being purchased, covering objectives, risk, past performance and costs. Delivery must occur before or at the time of the application, and the file should record that it happened.
Why the other options are wrong
- BThe folder describes the contract; each fund still needs its own summary document.
- CEvery fund the client buys requires its own document.
- DDelivery after issue defeats the purpose of informing the decision.
Exam tip
One fund facts document per fund selected, delivered at or before application.
Common mistake
Delivering documents only for the largest holding or only after the sale.
What this tests
CISRO competency component 3.2 — 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.