LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A client who says 'I never want to think about this again' has revealed:
- AA need for an actively traded account, since the client wants the agent to manage things day to day
- BHigh risk tolerance, since a client who does not want to watch the market is untroubled by declines
- CNothing useful, since a comment about involvement says nothing about objectives or tolerance
- A preference for simplicity, pointing to managed solutions with automatic rebalancing
Correct answer: D) A preference for simplicity, pointing to managed solutions with automatic rebalancing
Involvement preference is part of the profile. Portfolio funds suit hands-off clients.
Why the other options are wrong
- AActive trading demands constant involvement, the opposite of what the client asked for.
- BInvolvement is separate from tolerance; a hands-off client may still be risk-averse.
- CIt shapes the product structure the agent should recommend.
Exam tip
Hands-off clients → managed/portfolio solutions.
Common mistake
Building a complex multi-fund portfolio for a client who will not maintain it.
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.