LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A client wants to save for an adult son who qualifies for the disability tax credit. Before recommending a segregated fund in her own name, the agent should:
- Aopen the plan in the agent's own name for convenience and pay the proceeds over later
- raise the registered disability savings plan and the grants and bonds that may be available
- Cadvise that no registered plan exists for this purpose, so a personal deposit is the only route
- Drecommend transferring the money to the son immediately so that he can invest it himself
Correct answer: B) raise the registered disability savings plan and the grants and bonds that may be available
A disability savings plan can attract substantial government grants and bonds that a personal deposit cannot. The agent should identify the option, explain that the plan has its own rules and refer the family for specialist advice where needed.
Why the other options are wrong
- AHolding a client's money in the agent's own name would be a serious breach.
- CA registered plan for this purpose does exist and should be part of the discussion.
- DAn outright transfer gives up the grants and may create problems with benefits.
Exam tip
A disability tax credit in the family should always raise the disability savings plan.
Common mistake
Recommending ordinary savings and overlooking the grants available in the specialized plan.
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.