LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
A client shows the agent a statement for a group registered plan with employer matching. The review should note that:
- AThe matching contributions do not consume the client's own contribution room
- BThe plan is locked in, so the client cannot access the funds until leaving the employer
- The matched amount is an immediate return that usually makes the plan the first place to save
- DEmployer matching is a taxable benefit that makes the group plan worse than saving privately
Correct answer: C) The matched amount is an immediate return that usually makes the plan the first place to save
Nothing else in a portfolio offers a guaranteed return of that size, so the matched portion should generally be captured before other saving is considered.
Why the other options are wrong
- AEmployer contributions use the employee's own room.
- BGroup registered plan funds are not locked in, though the employer may restrict withdrawals.
- DThe employer's contribution to a group registered plan is taxable but fully offset by the deduction.
Exam tip
Capture the match before anything else.
Common mistake
Advising a client to save privately and leave employer matching unclaimed.
What this tests
CISRO competency component 1.2 — 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
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