Exam CIFC Topic 1 Question 204 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 204
Topic #: 1

Salvatore and Harriet recently got married. They are presently renting but are looking forward to buying a new home within 5 years. They both have separate savings established in their respective registered retirement savings plans (RRSPs) of $100,000 each. They have come to Dustin, a Dealing Representative, to open an additional joint investment account to increase their savings to assist with their future plans of buying a new home.
What does Dustin need to ensure about his recommendation?

A. That the recommended investment is different from what they currently own to avoid over-concentration. B. That the risk profile for this new account is the same as what has been determined for other accounts. C. That the risk profile of the investment and each client's individual risk profile are a match. D. That the investment recommendation is based on the risk profile of the new joint account.

Suggested Answer: D Vote an answer

Explanation
Dustin needs to ensure that his recommendation is suitable for the new joint account, which may have a different risk profile than the individual accounts of Salvatore and Harriet. A joint account is an account that is owned by two or more people who share the rights and responsibilities of the account. A joint account may have different investment objectives, time horizon, risk tolerance, and financial situation than the individual accounts of the joint owners. Therefore, Dustin needs to conduct a know your client (KYC) process for the joint account and determine the appropriate risk profile for the account, based on the collective responses of Salvatore and Harriet. The risk profile of the joint account will guide Dustin in recommending suitable investment products and services that match the goals and needs of the joint owners

by Herbert at Jan 16, 2025, 09:11 PM

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