LLQP Segregated Funds & Annuities · Component 3.2 · 25% of the exam
The confirmation notice for a client's purchase arrives showing a different fund from the one instructed. The agent should:
- Atell the client to accept the fund shown, as correcting it would trigger a taxable disposition
- Bdo nothing, since the insurer's records are authoritative and must reflect what was requested
- Cswitch the holding personally without telling the client, since the outcome will then be right
- report the discrepancy to the insurer promptly so that the error can be corrected
Correct answer: D) report the discrepancy to the insurer promptly so that the error can be corrected
Confirmation notices exist so that errors are caught quickly. The agent should compare the notice with the recorded instruction, raise any difference with the insurer at once and keep the client informed while it is resolved.
Why the other options are wrong
- AAn error should be corrected, and the client should not be left in the wrong fund.
- BAn insurer's record can contain an error, which is why the notice is reviewed.
- CActing without telling the client conceals the error and is an unauthorized transaction.
Exam tip
Always reconcile the confirmation notice against the instruction actually given.
Common mistake
Filing confirmation notices without checking them against the client's instruction.
What this tests
CISRO competency component 3.2 — 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.