LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
When a client's need is 'lowest cost growth with no estate or creditor concerns', the honest recommendation is:
- That a low-cost mutual or index fund may serve better, and the agent should say so
- BAn annuity, since a client with no estate concerns is best served by converting capital to lifetime income
- CA 100/100 segregated fund, since the full guarantee is the safest recommendation for any client
- DA GMWB contract, since the withdrawal guarantee provides growth with the certainty every client wants
Correct answer: A) That a low-cost mutual or index fund may serve better, and the agent should say so
Suitability sometimes points away from the agent's product. Professional integrity requires saying so.
Why the other options are wrong
- BAnnuities are not for accumulation.
- CIt adds cost without a matching need.
- DCostly and irrelevant to the stated need.
Exam tip
No matching need → say a cheaper alternative may fit.
Common mistake
Forcing a seg fund on a client who needs none of its features.
What this tests
CISRO competency component 3.1 — 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.