LLQP Segregated Funds & Annuities · Component 2.4 · 30% of the exam
The member's responsibilities in a capital accumulation plan include:
- ANone, since the sponsor and provider are responsible for every aspect of the plan's operation and its outcomes
- BGuaranteeing the returns of other members through a pooled reserve funded by contributions
- CSelecting the plan sponsor and negotiating the fees the provider will charge
- Making suitable investment choices, using the tools provided, reviewing periodically and bearing the risk
Correct answer: D) Making suitable investment choices, using the tools provided, reviewing periodically and bearing the risk
CAP Guidelines allocate responsibility to members for their decisions. Agents help through education and, where licensed, advice.
Why the other options are wrong
- AMembers carry the decision responsibility for their own accounts.
- BMembers are responsible only for their own accounts.
- CSponsors are the employers; members do not select them.
Exam tip
CAP member: choose, review, bear risk.
Common mistake
Members assuming the sponsor will make good investment losses.
What this tests
CISRO competency component 2.4 — 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.