LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
For a client with a pension from a former employer paid as a lump-sum transfer, the profile should establish:
- AThat the money is fully accessible, since a lump-sum transfer converts pension money into ordinary savings
- Whether the funds are locked-in and under which pension jurisdiction
- CThat it must be spent before retirement, since transferred pension money cannot be held indefinitely
- DNothing beyond the amount, since a transferred pension is treated like any other RRSP
Correct answer: B) Whether the funds are locked-in and under which pension jurisdiction
Locked-in status is a critical situational fact. It limits products and withdrawals.
Why the other options are wrong
- ALocked-in funds are not freely accessible.
- CThey are for retirement income and cannot simply be spent.
- DLocked-in status changes the withdrawal and income options entirely.
Exam tip
Pension transfers: locked-in? which jurisdiction? → LIF/annuity options.
Common mistake
Treating a LIRA like an ordinary RRSP.
What this tests
CISRO competency component 1.1 — 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.