LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A client ticks the highest risk tolerance on the questionnaire, then mentions she sold everything during the last market decline. The agent should:
- Aaccept the questionnaire result, since the written answer is the only valid record of tolerance
- Brefuse to serve her until she completes a second questionnaire giving consistent answers
- Crecommend the most aggressive fund available so the file matches the questionnaire exactly
- explore the contradiction and set the profile using her actual behaviour as well as her answers
Correct answer: D) explore the contradiction and set the profile using her actual behaviour as well as her answers
A questionnaire is a starting point, not the conclusion. Behaviour under stress is the better evidence of tolerance, so the agent should discuss the earlier sale, reconcile it with her answers and document the profile that results.
Why the other options are wrong
- AA tick box cannot override what the client actually did in a falling market.
- BA second questionnaire would not resolve the contradiction the agent has already seen.
- CMatching the file to a questionnaire the agent doubts would be a suitability failure.
Exam tip
When stated tolerance and past behaviour conflict, investigate and document the outcome.
Common mistake
Treating the risk questionnaire score as a final answer rather than a conversation starter.
What this tests
CISRO competency component 3.1 — 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.