LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
A couple hold a joint non-registered account and disagree about how much risk to take. Before recommending anything the agent should:
- ARecommend the more aggressive profile, since the account has a longer joint life expectancy
- Profile both, document the difference, and propose a mix or separate accounts acceptable to each
- CAverage the two risk scores, since a joint account represents the household's combined position
- DFollow the instructions of whichever spouse opened the account and signed the application form first
Correct answer: B) Profile both, document the difference, and propose a mix or separate accounts acceptable to each
Both holders are clients whose objectives must be recorded, and an arrangement that one of them would abandon in a downturn is not suitable for either.
Why the other options are wrong
- AThe more cautious holder would be exposed to risk they never accepted.
- CAveraging two scores produces a profile that fits neither person.
- DWho signed first confers no priority over the other holder's interests.
Exam tip
Two holders means two profiles and one agreed approach.
Common mistake
Recording the profile of the spouse who does the talking.
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.