IFSE Institute LLQP - Life License Qualification Program (LLQP)

Given Harry’scost sensitivityandfamily health history, the75% maturity and 100% death benefitcombination offerslower costscompared to a full 100%/100% guarantee while still ensuring full death benefit protection for his heirs.

Exact Extract:

"Clients concerned about cost but needing strong death benefit protection often select 75% maturity guarantees combined with 100% death benefit guarantees."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 2.1.1 Guarantees​)

Net worth is calculated by addingassetsand subtractingliabilities:

Assets = $744,000 + $41,000 + $196,000 = $981,000

Liabilities = $150,000 + $2,090 = $152,090

Net Worth = $981,000 - $152,090 =$828,910

Exact Extract:

"Net worth equals total assets minus total liabilities. Whole life insurance cash values are counted as assets."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 4.1 Financial Position of Client​)

Since the agent hadonly completed one prior transactionfor Helmut,Helmut was still considered a new clientfor identity verification purposes, and identification was mandatory. Failure to verify identity violates PCMLTFA regulations.

Exact Extract:

"Where there is no ongoing business relationship or where previous transactions were limited, the representative must identify the client again. Failure to do so for investments over $10,000 breaches PCMLTFA requirements."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 4.3 Compliance Requirements​)

As with most Deferred Profit Sharing Plan (DPSP) funds, Sebastian’s accumulated balance is generally locked-in, which means it cannot be withdrawn in cash while still under the plan. Instead, he may transfer it to a Locked-In Retirement Account (LIRA) upon leaving his employment or retiring, ensuring the funds remain tax-deferred. LLQP guidelines state that DPSP funds are generally subject to locking-in provisions, which restrict withdrawals and are specifically aimed at providing retirement income​​.

Thus, contrary to options A and B, Sebastian cannot withdraw the DPSP funds for discretionary purposes, such as funding his sabbatical, because of these restrictions. Option C is incorrect, as transferring to a Life Income Fund (LIF) would only be appropriate once the funds are in a LIRA, typically when Sebastian is closer to retirement age and ready to begin income withdrawals.

Since Beth’s transaction involves transferringregistered funds(RRIF) directly between financial institutions, and nocash movementis involved outside regulated channels, the transaction isexemptfrom FINTRAC reporting requirements.

Exact Extract:

"Transfers between registered accounts (e.g., RRIFs, RRSPs) handled institution to institution are exempt from FINTRAC record-keeping requirements such as large cash transaction records and third-party determination forms."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 4.3 Compliance Requirements【53:0†Segfunds-E313-2020-12-7ED.pdf**)

Keisha’s investment portfolio is highly concentrated in Belmont Inc. common shares, which include her TFSA and defined contribution pension plan (DCPP). This significant exposure to a single company’s stock poses a risk because the value of her investments is directly tied to the financial performance of Belmont Inc. Diversification is a key strategy to mitigate risk by spreading investments across various asset classes, industries, or geographic regions. This can reduce the impact of poor performance in any one area on the overall portfolio. According to LLQP content, one of the primary goals in managing an investment portfolio is to ensure appropriate diversification to avoid over-reliance on a single asset or asset type​​.

While other needs, like liquidity and emergency fund savings, are important, Keisha's immediate concern should be diversification. Her current investments do not provide adequate protectionagainst company-specific risks, such as the potential downturns specific to Belmont Inc. This aligns with LLQP principles, which emphasize diversification as a way to manage risk effectively and achieve a more stable financial outcome​.

A birth certificate is used for identity verification, not for determining investment goals, risk tolerance, or financial needs. An investor profile is built from documents that demonstrate financial assets, liabilities, income, and personal objectives.

Exact Extract:

"Information used to determine an investor profile includes assets, liabilities, income, investment objectives, and risk tolerance. Identification documents like birth certificates are not relevant to determining investment needs."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 4.1 Financial Situation of the Investor​)

Group TFSA contributionsare made withafter-tax moneyand grow tax-free.GRRSP contributionsreduce taxable income immediately because they aretax-deductible.

Exact Extract:

"Contributions to a TFSA are not deductible and must be made with after-tax dollars. RRSP (andGRRSP) contributions are tax-deductible, reducing taxable income."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 1.3.11 Group Plans​)

With afront-end sales charge, the investor pays a fee upfront, butno feesare deducted from ongoing investments or redemptions, andmanagement expensesare generally lower compared to deferred options. This matches Philip’s desire for no reductions or surprises after investing.

Exact Extract:

"Front-end sales charges are paid at the time of purchase. As a result, no further charges apply when units are sold, and investors benefit from a full investment of funds thereafter."

(Reference:Segfunds-E313-2020-12-7ED, Chapter 2.3.2.1 Front-End Sales Charge​)

A life annuity typically provides the highest monthly benefit compared to other annuity types because it does not include additional guarantees or features that reduce the payout, such as a guarantee period or indexing. Since Arianna is healthy and seeking the highest monthly income, a standard life annuity, which pays a fixed income for life without any additional features, will maximize her monthly benefit. LLQP resources confirm that adding options like guarantees or indexing typically lowers the monthly payout due to the insurer’s increased liability​​.

Option B would provide a lower benefit than a standard life annuity because of the 10-year guarantee. Option C (Indexed annuity) would have lower initial payments due to the cost of inflation protection, and Option D (Joint life annuity) would provide less income as it is designed to continue payments to a surviving spouse.