Use this syllabus as your checklist for the LLQP Segregated Funds & Annuities module. The competency weightings below are published by CSI for its course assessments and reflect the standard LLQP competency structure; your provincial exam provider may present the blueprint in a different way.
Official sources:
Official competency weightings (Segregated Funds & Annuities end-of-module test)
| Competency | Weight |
|---|
| Assess the client’s needs and situation | 35% |
| Analyze the available products that meet the client’s needs | 30% |
| Implement a recommendation adapted to the client’s needs and situation | 25% |
| Provide customer service during the validity period of the coverage | 10% |
What’s covered
Assess the client’s needs and situation (35%)
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Investment and Savings
- Explain why Canadians save and invest (e.g., emergency fund, education, home purchase, retirement, estate goals) and how goals influence product selection.
- Differentiate saving from investing, including typical risk, return, and liquidity characteristics of each.
- Describe the relationship between risk and expected return and why higher expected returns generally involve higher uncertainty.
- Explain the time value of money and compounding, including why starting early can materially improve long-term outcomes.
- Describe the impact of inflation on purchasing power and why investment strategies may need to address inflation risk.
- Identify the main asset classes (cash/cash equivalents, fixed income, equities, real estate, alternatives) and typical risk/return patterns.
- Differentiate income return and capital appreciation, including common sources (interest, dividends, capital gains).
- Explain diversification and how combining different assets can reduce portfolio risk without necessarily reducing expected return.
- Describe liquidity risk and the importance of matching product liquidity to client cash‑flow needs and time horizon.
- Differentiate market risk, interest rate risk, credit risk, and currency risk as they relate to investment products.
- Explain the role of asset allocation in managing risk, and describe why periodic rebalancing may be appropriate.
- Describe dollar-cost averaging and how regular contributions can reduce timing risk for clients investing over time.
- Compare active and passive investment approaches, including potential trade-offs in cost, tracking error, and manager risk.
- Identify common investment fees (e.g., management expense ratio, insurance/guarantee costs, trading costs) and explain how fees affect net returns.
- Explain how registered vs non-registered accounts can affect after-tax returns at a high level (e.g., tax deferral, tax-free growth, taxable income).
- Describe basic tax characteristics of investment income (interest, eligible/non-eligible dividends, capital gains) at a high level.
- Recognize behavioural factors that can affect investor decisions (e.g., loss aversion, recency bias, panic selling) and how advisor coaching can help.
- Explain why an investor’s time horizon, risk tolerance, and capacity for loss must be aligned with product risk level.
- Describe how life events (marriage, divorce, new child, job loss, health changes) can change savings priorities and investment suitability.
- Identify how insurance-based investment products (segregated funds, annuities) can address specific risks such as longevity, probate delay, and creditor exposure.
- Recognize that segregated funds are offered through life insurance companies under an Individual Variable Insurance Contract (IVIC) framework.
- Explain the purpose of guarantees and insurance features in investment products and the trade-off between guarantees and cost/constraints.
Investor Profile
- List the core Know-Your-Client (KYC) elements needed before recommending segregated funds or annuities (identity, objectives, time horizon, risk tolerance, financial situation).
- Gather and interpret key personal information that can affect recommendations (e.g., health concerns, expected longevity, family situation).
- Identify legal/estate planning elements to confirm (e.g., will status, power of attorney) and explain how these can influence beneficiary and ownership decisions.
- Determine the purpose of the account (retirement savings, non-registered investing, education funding) and how it shapes product and asset allocation choices.
- Clarify client financial goals and prioritize competing goals when cash flow is limited.
- Assess whether the client has a need or preference for guaranteed investments and identify what risks the client is trying to reduce.
- Determine an appropriate time horizon for each goal, including short-, medium-, and long-term horizons.
- Collect and review financial documents relevant to assessing suitability (e.g., income tax returns, bank statements, mortgage statements, pension statements).
- Prepare a basic balance sheet (assets and liabilities) to estimate net worth and identify creditor exposure.
- Prepare a cash flow summary or budget to determine savings capacity and affordability of contributions.
- Identify liquidity needs and emergency fund adequacy before recommending long-term or restricted products.
- Assess risk tolerance (willingness to accept volatility) using client statements and behavioural cues.
- Assess capacity for loss (ability to withstand losses) based on income stability, net worth, and time horizon.
- Assess client investment knowledge and experience to determine product complexity that is appropriate.
- Explain volatility and how short-term market fluctuations can affect segregated fund values and client reactions.
- Determine whether the client is primarily seeking capital preservation, income, growth, or a balanced objective.
- Identify client constraints that may affect recommendations (tax status, ethical preferences, employer plan rules, beneficiary intentions).
- Identify the client’s current savings and investment holdings (registered, non-registered, group plans) and evaluate concentration risk.
- Recognize when a client’s needs review indicates potential gaps in retirement income planning and longevity protection.
- Recognize when a client’s income survey and expense profile indicates vulnerability to market downturns or sequence-of-returns risk.
- Determine the client’s need for estate planning features (beneficiary designation, bypassing probate) and how that affects product suitability.
- Determine the client’s need for creditor protection and recognize situations where insurance-based products may provide creditor protection benefits.
- Explain the importance of documenting KYC/investor profile information and maintaining records to support suitability decisions.
- For group plans, assess the group’s composition and whether needs are short-term or long-term (e.g., retention vs retirement outcomes).
- For group plans, assess employer/employee funding commitment and payroll contribution mechanics that affect plan design and feasibility.
- Identify timing considerations for implementing a group retirement plan (rollout, employee education, enrollment windows).
Assessing Existing Coverage and Retirement Resources
- Identify the main government retirement programs that may form part of a client’s retirement resources (CPP/QPP, OAS, GIS, Allowance) and recognize their planning relevance.
- Explain at a high level how contributions and benefits under CPP/QPP can affect retirement income planning decisions.
- Explain at a high level how OAS and income-tested benefits (e.g., GIS) can affect retirement planning and product suitability.
- Recognize that government pension contributions are generally not deductible in the same way as RRSP contributions and that benefits are taxable.
- Describe the purpose of RRSPs and recognize when an RRSP is commonly used for retirement accumulation.
- Differentiate a spousal RRSP from an individual RRSP and recognize when income splitting may be a planning objective.
- Describe the purpose of a RRIF and recognize its role in converting retirement savings to retirement income.
- Recognize the purpose of TFSAs and how tax-free growth/withdrawals can complement retirement and savings strategies.
- Identify other common registered plans that may appear in a client’s needs analysis (RESP, RDSP, PRPP) and their high-level purpose.
- Describe how group pension or group retirement plans can contribute to retirement resources (contributions, employer matching, benefits).
- Assess whether existing group plan coverage aligns with the client’s objectives, time horizon, and risk tolerance.
- Identify non-registered savings/investment accounts and explain how taxable investing can fit alongside registered plans.
- Recognize that life insurance policies and annuities may form part of a client’s overall financial plan and assess how they interact with savings goals.
- Assess the appropriateness of existing segregated fund holdings by comparing current allocation, guarantees, fees, and time horizon to the client’s updated profile.
- Assess the appropriateness of existing annuity holdings by reviewing payout structure, guarantees, and how well income needs are met.
- Identify signs of over-concentration in a client’s current holdings (single sector, single fund family, single asset class) and potential diversification needs.
- Identify the client’s existing creditor exposure (business debts, personal loans, HELOC, guarantees) and how it may affect product selection.
- Recognize situations where liquidity constraints or upcoming cash needs may make certain segregated fund/annuity features inappropriate.
- Recognize when a client’s estate goals (beneficiary designations, probate avoidance, dependents) require reviewing current beneficiary arrangements and ownership structure.
- Explain why periodic reviews of registered plan contribution strategy and withdrawal strategy can be relevant when recommending segregated funds and annuities.
- Identify gaps between client objectives and existing coverage (insufficient retirement income, excessive risk, lack of guarantees) and summarize them as needs.
- Document key findings from the coverage review, including assumptions, client priorities, and constraints that will drive the recommendation.
Analyze the available products that meet the client’s needs (30%)
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Segregated Funds
- Define a segregated fund and explain how it differs from a mutual fund because it is offered through a life insurance contract (IVIC) with insurance guarantees.
- Describe the roles of the insurer, fund manager, advisor, and contract holder in a segregated fund arrangement.
- Identify the main types of segregated funds by asset class (money market, bond, equity, balanced, real estate, index, specialty, fund-of-funds).
- Match common investor objectives (income, growth, capital preservation) with suitable categories of segregated funds.
- Explain how unit values/net asset value of a segregated fund fluctuate with market performance and how this affects market value.
- Describe maturity guarantees and death benefit guarantees, including how guarantee levels protect a portion of deposits subject to contract terms.
- Explain how resets (or “step-ups”) can increase the guaranteed amount and describe trade-offs such as reset rules or fees.
- Describe creditor protection as a potential feature of segregated fund contracts and identify common conditions that influence protection.
- Explain how beneficiary designations can facilitate transfer of proceeds on death and may reduce probate delays in many situations.
- Describe the right to cancel (cooling-off period) and when it may apply to a segregated fund contract purchase.
- Identify common fees and charges associated with segregated funds (management fees, insurance/guarantee costs, administrative fees) and their impact on returns.
- Explain sales charge structures at a high level (e.g., front-end, deferred sales charge where still applicable) and how they affect liquidity.
- Describe fund switching and rebalancing features and how they can support maintaining a target asset allocation.
- Explain withdrawal options (partial withdrawals, systematic withdrawals) and how withdrawals can affect guarantees and future benefits.
- Describe guaranteed income features that may be available in some segregated fund contracts (e.g., GMWB/GLWB) and the client needs they address.
- Explain “managed volatility” or similar risk-management features in segregated funds and how they may support guarantee and risk objectives.
- Identify key disclosure documents used for segregated funds (information folder, Fund Facts) and what information clients should expect to find (risks, costs, guarantees).
- Explain how segregated funds compare to GICs and deposit-type investments in terms of guarantees, liquidity, and potential returns.
- Explain how segregated funds compare to mutual funds and ETFs in terms of insurance features, fees, and estate/creditor planning elements.
- Recognize Assuris coverage as a consumer protection mechanism for certain insurance products, including segregated fund guarantees, and describe its general purpose.
- Identify common risks in segregated funds (market risk, fund manager risk, liquidity constraints, guarantee limitations) and how to communicate them clearly.
- Analyze whether a segregated fund is suitable for a client seeking estate planning benefits or creditor protection compared to other strategies.
- Analyze suitability for clients near retirement, including sequence-of-returns risk, income needs, and potential role of guarantees or income riders.
- Apply basic taxation concepts for segregated fund contracts held in non-registered accounts (e.g., taxable income from withdrawals/realizations) at a high level.
- Explain tax implications of guarantee “top-ups” (e.g., death/maturity guarantee payments) and how they may be treated in general terms.
- Evaluate trade-offs between higher guarantee features and higher costs or restrictions, and select an appropriate balance for a client’s profile.
Annuities
- Define an annuity and explain its core purpose: converting a lump sum into a stream of income through an insurance contract.
- Differentiate accumulation (deferred) annuities and payout (immediate) annuities at a high level.
- Differentiate life annuities and term-certain annuities, including how longevity risk is treated in each.
- Compare single-life and joint-and-survivor annuities and identify scenarios where spousal continuation is important.
- Explain guarantee periods (e.g., 5/10 years) and how they can protect heirs if death occurs shortly after annuitization.
- Describe payment frequency options and common choices (monthly, quarterly) and why cash flow needs drive selection.
- Describe inflation risk in retirement income and how indexing or other strategies can address it in an annuity context.
- Explain how interest rates at time of purchase can affect annuity payout levels and why timing can matter.
- Identify how annuities can complement government benefits and registered plan withdrawals as part of a retirement income strategy.
- Differentiate registered and non-registered annuity purchases at a high level and how tax treatment may differ.
- Recognize that an annuity purchase involves contract roles (owner, annuitant, beneficiary) and describe their practical implications.
- Identify the main advantages of annuities (predictable income, longevity protection, simplicity) and main disadvantages (illiquidity, inflation risk, opportunity cost).
- Determine suitability of an annuity for clients with low risk tolerance, high need for stable income, or concern about outliving assets.
- Determine situations where an annuity may be unsuitable (need for liquidity, desire for growth, short time horizon, poor health considerations).
- Describe how annuity guarantees and options (joint, guarantee period, indexing) affect trade-offs between payout level and protection features.
- Explain the concept of commutation/termination restrictions and why many annuities are not easily reversible after purchase.
- Identify how annuity income may impact cash flow planning, taxes, and eligibility for income-tested benefits at a conceptual level.
- Compare annuities to systematic withdrawal strategies from investment funds in terms of longevity risk and market risk exposure.
- Explain how death of the annuitant is handled depending on annuity structure (single life, joint, guarantee period) at a high level.
- Select an appropriate annuity type and options for a client scenario, integrating objectives, risk profile, and family situation.
Group Retirement and Investment Plans
- Identify common group retirement and investment plan types available in Canada (e.g., group RRSP, DPSP, defined contribution pension plan, group TFSA, group annuity/accumulation products).
- Explain why employers offer group plans (retention, recruitment, retirement support) and how plan goals influence plan design.
- Describe how contributions are typically funded (employee, employer matching, voluntary vs mandatory, payroll deductions) and why funding commitment matters.
- Explain the concept of “forced savings” through payroll deductions and how it can support long-term retirement outcomes.
- Describe common investment options within group plans, including segregated fund choices and default investment options.
- Explain why group plans may have lower costs or different fee structures than individual products and how this affects net returns.
- Describe member participation features such as fund switches, rebalancing options, and withdrawal rules within a group plan context.
- Recognize that group plans often have simplified enrollment and may not require medical underwriting for investment components.
- Explain basic plan governance and roles (plan sponsor/employer, plan administrator, insurer/provider, plan members).
- Identify how vesting, portability, and unlocking/locking-in restrictions may affect plan member choices (high level).
- Assess group plan suitability for an employer group by considering group composition, objectives, and employee demographics.
- Compare group plans to individual saving strategies and identify when each approach may be appropriate for a client.
- Identify how group plan benefits interact with government pensions and individual registered plans in a holistic retirement strategy.
- Select an appropriate group plan type and funding approach for a simple employer scenario based on objectives and constraints.
Implement a recommendation adapted to the client’s needs and situation (25%)
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Segregated Fund and Annuity Recommendation
- Summarize client objectives, constraints, and investor profile into clear planning priorities that will guide the recommendation.
- Select an appropriate overall strategy (segregated funds, annuity, group plan, or combination) based on the client’s needs and situation.
- Design an asset allocation consistent with the client’s risk profile and time horizon and explain the rationale in plain language.
- Select segregated fund categories (e.g., balanced, equity, bond) that align with the recommended asset allocation and investment objectives.
- Select an appropriate guarantee level and features (resets, income riders where applicable) consistent with client needs for protection vs cost.
- Explain to the client how guarantees work and what they do not guarantee (e.g., market value can still fluctuate).
- Evaluate whether an annuity should be recommended now, later, or not at all based on income needs, health/longevity concerns, and liquidity needs.
- Select annuity options (single vs joint, guarantee period, indexing) that align with the client’s family and income objectives.
- Incorporate tax considerations at a high level (registered vs non-registered funding, impact on taxable income) when selecting products.
- Incorporate estate planning considerations (beneficiary designations, probate, dependents) when recommending segregated funds or annuities.
- Incorporate creditor exposure considerations when recommending insurance-based investment products, recognizing limits and conditions.
- Compare the recommended solution to reasonable alternatives (mutual funds/ETFs, GICs, systematic withdrawals) and justify why the recommendation best meets needs.
- Identify and disclose key costs and compensation considerations relevant to the recommended products and explain how they affect outcomes.
- Identify key risks of the recommended strategy (market risk, inflation risk, liquidity constraints, benefit impacts) and document mitigation steps.
- Prepare a recommendation summary that includes product selection, fund allocation, contribution plan, and key client instructions (e.g., beneficiary).
- Confirm suitability by checking that the recommended product risk level matches the client profile and that liquidity needs are met.
- Identify when a client request conflicts with suitability and describe appropriate next steps (education, adjusted proposal, or declining recommendation).
- Explain the implementation steps to the client (paperwork, disclosures, funding, timelines) and confirm understanding.
- Document the rationale for recommendations and any client decisions that differ from the recommendation (including reasons).
- Develop an initial service plan (review frequency, triggers for updates, communication plan) tailored to the recommended products.
Segregated Fund Contracts
- Identify the key parties to a segregated fund contract (owner/contract holder, annuitant/life insured where applicable, beneficiary) and describe their rights and responsibilities.
- Identify the main contract documents used for segregated funds (application, contract/policy, information folder, Fund Facts) and explain their purpose.
- Explain common funding methods (lump-sum deposit, periodic contributions, transfers from registered plans) and suitability considerations for each.
- Describe how initial fund allocation instructions are provided and how allocation choices link to investor profile and risk level.
- Explain how switches between funds are processed and how switching can affect fees, guarantees, and suitability.
- Explain how market value, deposits, and guarantee base(s) are tracked and why market value and guaranteed value can differ.
- Describe maturity provisions, including what happens at maturity and how maturity guarantees are applied subject to contract terms.
- Describe death benefit provisions, including how the death benefit may be calculated and paid to beneficiaries.
- Explain how partial withdrawals and systematic withdrawals can reduce guarantees and affect future benefits.
- Explain how resets/step-ups are requested or applied and how they can affect future guarantees and fees.
- Describe optional income benefits (e.g., GMWB/GLWB) at a contract-operation level: deposits, withdrawal limits, and consequences of excess withdrawals.
- Identify common charges that may apply to contract transactions (e.g., surrender charges where applicable, market value adjustments where applicable) and discuss liquidity implications.
- Describe how segregated fund contracts are valued and how information is communicated to clients (statements, confirmations, online access).
- Explain how beneficiary designations are recorded, updated, and verified, and recognize life events that trigger review.
- Explain how ownership changes, assignments, or transfers may affect tax, control, and suitability considerations.
- Recognize cancellation rights and rescission processes and explain what client actions and timelines may be involved (high level).
- Confirm implementation requirements before submitting an application (complete KYC, disclosures delivered, client signatures/authorizations, funding instructions).
- Identify common implementation errors (missing signatures, inconsistent KYC, unsuitable allocation, incorrect beneficiary) and how to prevent them.
Annuity Contracts
- Identify the key parties to an annuity contract (owner, annuitant, beneficiary where applicable) and how they affect payment and estate outcomes.
- Describe the information typically required on an annuity application (identity, funding source, payout options, beneficiary, payment instructions).
- Explain how annuity purchase funding sources (registered vs non-registered) affect implementation steps and client documentation.
- Describe how annuity income payments begin, including effective date, payment frequency, and first payment timing considerations.
- Explain how optional features (joint payments, guarantee period, indexing) are elected and how they affect the contract and payments.
- Describe contract limitations on changes after purchase and why many annuity elections are difficult to reverse.
- Explain how death is handled under different annuity structures (single life with guarantee, joint survivor) and what documents are typically required.
- Describe how annuity income is reported for tax purposes at a high level and why clients should anticipate tax withholdings or reporting obligations.
- Recognize how commutation or surrender options (if any) may be restricted and what client risks this creates (illiquidity).
- Confirm implementation requirements before placing an annuity (client suitability, disclosures, correct option selection, signatures, banking instructions).
- Identify common annuity implementation errors (wrong option selection, missing spouse consent where relevant, incorrect beneficiary, payment setup errors) and how to prevent them.
- Explain when an annuity recommendation should be accompanied by a plan for remaining assets (e.g., liquidity reserve, growth bucket) and how to document the overall strategy.
Provide customer service during the validity period of the coverage (10%)
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Ongoing Service and Claims
- Establish a review schedule for segregated fund and annuity clients and identify events that trigger an out-of-cycle review (life events, market changes, job change).
- Update and document the client’s investor profile periodically to ensure ongoing suitability of fund allocations and product features.
- Interpret segregated fund annual statements with the client, explaining market value, deposits, withdrawals, fees, and guarantees in plain language.
- Review portfolio performance relative to objectives and risk tolerance and discuss whether rebalancing or allocation changes are appropriate.
- Process client instructions for fund switches or reallocations, confirming suitability and documenting rationale for changes.
- Evaluate requests for withdrawals (lump-sum or systematic) and explain impacts on guarantees, income riders, and tax (high level).
- Validate whether a requested contract amendment (e.g., beneficiary change, ownership change) is appropriate given the client’s updated situation.
- Validate whether renewing, resetting, or terminating a contract is appropriate based on costs, guarantees, time horizon, and client objectives.
- Recognize red flags for unsuitable churn or excessive switching and describe how to address them through client education and documentation.
- Explain common service issues unique to segregated funds (guarantee tracking, reset timing, market downturn conversations) and how to handle them.
- Explain common service issues unique to annuities (payment changes, tax withholding, banking updates) and how to resolve them.
- Describe the steps in a segregated fund death claim at a high level (notification, documents, valuation date, payment to beneficiary).
- Describe the steps in an annuity death claim at a high level, recognizing differences by annuity structure (guarantee period, joint payments).
- Explain how maturity guarantee claims (where applicable) are handled and what client documentation and timelines may be involved.
- Guide clients through the annuitization decision (if applicable) and explain administrative steps and consequences.
- Handle client complaints and service concerns related to performance, fees, or guarantees using a clear process and proper documentation.
- Ensure ongoing disclosure and client understanding of product changes, fund changes, or updates to information folder/Fund Facts when relevant.
- Maintain accurate records of all advice, disclosures, client instructions, and transactions to support regulatory compliance and client service continuity.
- Coordinate with other professionals (tax, legal, accountant) when client situations become complex, while staying within scope of licence.
- Demonstrate best practices for ongoing client education on market volatility and long-term investing to reduce panic-driven decisions.
Tip: Treat each learning objective as a “can I answer a scenario question about this in 60–90 seconds?” test. If not, add it to your miss log and drill it again in 48–72 hours.