LLQP Segregated Funds & Annuities · Component 1.3 · 35% of the exam
The core retirement need is best expressed as:
- The gap between desired retirement income and what benefits, pensions and savings will provide
- BThe best guarantee available, since retirement money must be protected from loss above all
- CThe number of years to retirement, since horizon is what determines the recommendation
- DThe choice of fund, since the fund's returns are what will determine the client's retirement income
Correct answer: A) The gap between desired retirement income and what benefits, pensions and savings will provide
The curriculum asks agents to articulate needs based on risks to the client's financial situation. A retirement income gap analysis is the central calculation.
Why the other options are wrong
- BGuarantees are features, not the need itself.
- CThe client's horizon is an input to the calculation, not the need.
- DProducts follow needs; the fund is chosen after the gap is known.
Exam tip
Retirement need = desired income − (government + pension + existing savings income).
Common mistake
Recommending a product without quantifying the income gap.
What this tests
CISRO competency component 1.3 — 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.