LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
After a full discussion, a client still insists on a product the agent believes is unsuitable for her. The agent's correct course is to:
- restate the recommendation and the reasons in writing, and decline if it remains unsuitable
- Bprocess it and blame the client in the file should the insurer later ask any questions
- Cprocess the request quietly, since the client is an adult who has made her own decision
- Dsubstitute the fund the agent prefers, since the agent's professional judgement must prevail
Correct answer: A) restate the recommendation and the reasons in writing, and decline if it remains unsuitable
An agent is not obliged to place a transaction believed to be unsuitable. The proper steps are to explain the concern clearly, confirm it in writing, offer alternatives and decline where the concern cannot be resolved.
Why the other options are wrong
- BA file note blaming the client is not a substitute for proper advice.
- CProcessing quietly leaves the agent responsible for an unsuitable sale.
- DSubstituting a different fund without instruction would be an unauthorized transaction.
Exam tip
An agent may always decline a transaction that cannot be made suitable.
Common mistake
Believing a client's insistence transfers responsibility away from the agent.
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.