LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
Investment objectives are commonly classified as:
- Safety of capital, income, growth and liquidity, in some combination and priority
- BRegistered and non-registered, since the tax wrapper determines what the client is trying to achieve
- CDomestic and foreign, since geographic exposure is the primary decision in building a portfolio
- DShort-term and long-term, since the horizon is the only objective that matters for fund selection
Correct answer: A) Safety of capital, income, growth and liquidity, in some combination and priority
These four objectives frame product selection. A retiree prioritizes income and safety; a young saver prioritizes growth.
Why the other options are wrong
- BRegistration is a tax structure, not an investment objective.
- CGeography is an asset allocation choice made after the objectives are set.
- DHorizon is a profile element, but it is not the classification of objectives.
Exam tip
Objectives: safety, income, growth, liquidity — rank them.
Common mistake
Failing to ask the client to prioritize among objectives.
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:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
- A client with little investment knowledge and no experience with market fluctuations should be:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.