LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
A registered transfer will take several weeks during which the client's money is not invested. At implementation the agent should:
- Apromise that the insurer will credit the return the client would otherwise have earned
- Bavoid mentioning the gap, since the client would only worry about something unavoidable
- Cdelay submitting the transfer until the agent judges that markets have become calm
- explain the out-of-market period so the client understands the risk before agreeing
Correct answer: D) explain the out-of-market period so the client understands the risk before agreeing
An out-of-market period cuts both ways: the client misses a rise and avoids a fall. Setting the expectation in advance prevents a complaint later and is part of explaining what the recommendation actually involves.
Why the other options are wrong
- ANo insurer compensates a client for returns missed during a transfer.
- BWithholding a material feature of the transaction is a disclosure failure.
- CTiming the market is not the agent's role and delays the client's instruction.
Exam tip
Disclose the out-of-market gap on any transfer before the client agrees to it.
Common mistake
Leaving a client to discover the transfer gap when the statement arrives.
What this tests
CISRO competency component 3.2 — 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.