LLQP Segregated Funds & Annuities · Component 2.1 · 30% of the exam
Segregated funds are managed by:
- AThe provincial regulator, which approves every holding in advance to protect contract holders from loss
- BThe contract holder, who directs the insurer on which securities the fund should buy
- CThe agent, who selects and trades the securities on the client's behalf
- Professional portfolio managers engaged by the insurer, following the fund's objectives
Correct answer: D) Professional portfolio managers engaged by the insurer, following the fund's objectives
Professional management is a core benefit. The information folder describes objectives and strategies.
Why the other options are wrong
- ARegulators supervise; they do not manage.
- BThe holder chooses funds but does not manage them.
- CAgents recommend; they do not manage.
Exam tip
Professional management per the fund's stated mandate.
Common mistake
Implying the agent manages the fund's holdings.
What this tests
CISRO competency component 2.1 — Analyze the available products that meet the client's needs — which is weighted at 30% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 2
- A segregated fund's 'guaranteed amount' after a partial withdrawal under proportional reduction is:
- A distinctive estate advantage of a segregated fund over a non-registered mutual fund held jointly with a child is:
- Segregated fund guarantees are most valuable relative to their cost when:
- A segregated fund's annual statement reports:
- Compared with a segregated fund, an exchange-traded fund (ETF) generally offers:
- A segregated fund's 'automatic death benefit reset' feature:
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.