LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A client tells the agent his adult son will 'handle everything' but the son holds no legal authority. The agent should:
- ARecord the son as a joint owner of the contract so that he is able to give instructions in future
- Deal with the client directly, welcome the son's presence with consent, and note any capacity concerns
- CRefuse to meet while the son is present, since family members compromise the client's independence
- DTake instructions from the son, since the client has clearly delegated the decisions to him
Correct answer: B) Deal with the client directly, welcome the son's presence with consent, and note any capacity concerns
Only the client can instruct the agent unless a valid authority exists, though a family member may sit in with the client's consent and may become a trusted contact.
Why the other options are wrong
- AAdding an owner transfers property and is not a substitute for authority.
- CA supportive family member is helpful where the client wants them there.
- DInformal delegation does not give the son authority over the account.
Exam tip
Instructions come from the client unless authority is documented.
Common mistake
Accepting account instructions from a relative with no legal authority.
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.