LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
A client tells the agent he has 'a pension from work' without further detail. The review must establish:
- AThe name of the insurer, since that determines the security of the payments the plan has promised
- BOnly the monthly amount, since that is the figure the retirement projection requires
- Whether it is defined benefit or defined contribution, and whether it is indexed and has a survivor benefit
- DNothing further, since employer pensions are outside the scope of an investment review
Correct answer: C) Whether it is defined benefit or defined contribution, and whether it is indexed and has a survivor benefit
Those features decide how much risk the client still carries, whether inflation is covered and what the surviving spouse will receive, all of which shape the rest of the plan.
Why the other options are wrong
- AMost pensions are administered by the sponsor rather than an insurer.
- BThe amount alone hides indexing, survivor terms and who bears the risk.
- DThe pension is usually the largest single element of the retirement picture.
Exam tip
Type, indexing, survivor benefit: then the amount.
Common mistake
Recording a pension as a single number.
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
Timed sets weighted like the exam, and review of every question you miss. Free to start.