LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A client who expects to move to another country in three years should be profiled with attention to:
- ANothing special, since Canadian contracts continue unchanged wherever the holder happens to live
- Residency changes affecting tax on registered plans, deemed dispositions, and keeping contracts abroad
- CThe fund's country of investment, since a client moving abroad should hold funds invested in that country
- DOnly the currency of the destination, since exchange rates are the sole effect of a move
Correct answer: B) Residency changes affecting tax on registered plans, deemed dispositions, and keeping contracts abroad
Residence is part of the situation. Emigration has tax consequences and may limit the ability to hold or contribute to certain plans.
Why the other options are wrong
- AEmigration changes the tax and practical analysis.
- CWhere the fund invests has nothing to do with the consequences of emigration.
- DCurrency is one of several issues, and not the largest.
Exam tip
Planned emigration: tax on departure, plan restrictions, servicing abroad.
Common mistake
Locking a soon-to-emigrate client into a long DSC schedule.
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.