LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
An agent completes a sale and files the application and the confirmation notice. The record of the transaction is incomplete unless it also shows:
- the client's information, the recommendation made and the reasons supporting it
- Bthe client's own investment research and the sources the client consulted before deciding
- Cthe commission the agent earned and the ranking of that sale within the agency
- Da copy of the insurer's internal approval notes relating to the client's application
Correct answer: A) the client's information, the recommendation made and the reasons supporting it
If the transaction is questioned years later, the file must show what the agent knew, what was recommended and why it suited the client. Transaction documents alone cannot demonstrate that the advice was appropriate.
Why the other options are wrong
- BThe client's private research is not something the agent must obtain or hold.
- CCompensation records are kept elsewhere and do not evidence suitability.
- DInternal insurer notes are not part of the agent's own client file.
Exam tip
The file must answer what was known, what was advised and why it was suitable.
Common mistake
Keeping only the forms and losing the evidence of the reasoning behind the advice.
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.