LLQP Segregated Funds & Annuities · Component 1.1 · 35% of the exam
Two spouses have very different risk tolerances. For a joint investment, the agent should:
- AProfile the spouse who manages the household finances, since that person will make the decisions
- Discuss the difference, document both, and recommend an approach acceptable to both
- CDecline to invest for them until they have agreed on a single profile between themselves
- DUse the more aggressive profile, since the joint horizon is long enough to absorb volatility
Correct answer: B) Discuss the difference, document both, and recommend an approach acceptable to both
Suitability applies to each client. The conservative spouse's capacity governs joint money unless assets are separated.
Why the other options are wrong
- ABoth spouses are clients and each one's profile must be respected.
- CThe situation is manageable through discussion and documentation.
- DThe conservative spouse would be exposed to unacceptable risk.
Exam tip
Differing spouses: document both; conservative governs joint money or split accounts.
Common mistake
Profiling only the spouse who talks.
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.