LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
For a client whose group RRSP offers only high-fee funds, the recommendation may be:
- Contribute enough to capture the full employer match, and direct additional savings to lower-cost vehicles
- BComplain to the insurer about the fund line-up, since the provider is obliged to offer low-cost options on request
- CSkip the group plan entirely, since the fee difference will outweigh any benefit over a working lifetime
- DContribute only to the group plan, since payroll deduction and employer matching make it the best home for all savings
Correct answer: A) Contribute enough to capture the full employer match, and direct additional savings to lower-cost vehicles
Employer matching is an immediate return no fee difference can offset. Beyond the match, cost matters.
Why the other options are wrong
- BA complaint is not a recommendation for the client.
- CSkipping the group plan forfeits the employer's matching contribution.
- DHigher fees apply to unmatched money that could go elsewhere.
Exam tip
Capture the match; optimize cost beyond it.
Common mistake
Advising a client to leave employer matching on the table.
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.