LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
The client profile must be:
- ACompleted once at the first meeting, since a properly done profile does not change over a client's lifetime
- BKept verbal, since a written profile could later be used against the agent in a dispute
- Documented, acknowledged by the client, and updated when circumstances change
- DOptional for experienced clients, who may waive the profiling process in writing
Correct answer: C) Documented, acknowledged by the client, and updated when circumstances change
KYC is dynamic: a profile records the client at one moment, and regulators expect it to be documented, acknowledged and updated whenever circumstances change or at regular reviews.
Why the other options are wrong
- ACircumstances change, so the profile must be revisited.
- BDocumentation is required; a verbal profile cannot be evidenced.
- DDocumenting and updating the profile is mandatory for every client.
Exam tip
Document KYC; update on life events and reviews.
Common mistake
Relying on a five-year-old risk questionnaire.
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.