LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
A recommendation should be presented to the client with:
- A plain-language explanation of the product, how it meets each need, guarantees, fees, risks, tax, alternatives and reasons
- BOnly the fund's past returns, since performance is what the client will use to judge the recommendation later
- CA firm deadline to sign, since a client who delays may lose the unit price or the guarantee terms on offer
- DOnly the application, since the information folder and fund facts will explain everything the client needs
Correct answer: A) A plain-language explanation of the product, how it meets each need, guarantees, fees, risks, tax, alternatives and reasons
Informed consent and documentation are the recommendation's completion. Past returns alone mislead.
Why the other options are wrong
- BPast returns are not a basis for the recommendation.
- CPressure undermines suitability and informed consent.
- DThe application is the last step, not the presentation.
Exam tip
Present: product, needs match, guarantees and limits, fees, risks, tax, alternatives.
Common mistake
Leading with past performance.
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.