LLQP Segregated Funds & Annuities · Component 1.2 · 35% of the exam
For a client who has never filed tax returns for several years, the assessment should note:
- AThat RRSP room is unlimited until the returns are filed, since no room has been used
- BNothing in particular, since tax filing is the accountant's concern rather than the agent's
- That RRSP room and income-tested benefits depend on filing, which should be brought current first
- DThat the client cannot invest at all until every outstanding return has been assessed
Correct answer: C) That RRSP room and income-tested benefits depend on filing, which should be brought current first
Tax compliance underpins registered planning. Unfiled returns leave room and benefits unknown.
Why the other options are wrong
- ARoom is calculated from filed earned income; unfiled years create no room.
- BIt affects room and benefits, so it matters to planning.
- DInvesting is possible, but planning needs accurate data.
Exam tip
Unfiled returns → unknown RRSP room and lost benefits; fix first.
Common mistake
Contributing to an RRSP with unverified room.
What this tests
CISRO competency component 1.2 — 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.