LLQP Segregated Funds & Annuities · Component 3.1 · 25% of the exam
When recommending a RESP invested in segregated funds, the design should:
- Capture grants with annual contributions, shifting from growth to conservative holdings as enrolment nears
- BHold equities until the child starts university, since the longest possible growth period maximizes the fund
- CUse a life annuity on the child, since guaranteed payments will cover tuition for as long as the studies last
- DSet the grants aside, since the paperwork outweighs the value of the government's contribution
Correct answer: A) Capture grants with annual contributions, shifting from growth to conservative holdings as enrolment nears
RESP design follows a defined date; the glide path and guarantee timing are the recommendation details.
Why the other options are wrong
- BEquity risk near the date threatens the goal.
- CAn annuity is not for education saving.
- DGrants are free money the client should not forgo.
Exam tip
RESP: grants, glide path, guarantee at enrolment.
Common mistake
Missing the grant by lump-sum contributing in one year without carry-forward planning.
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.