Chapter 3

Question 1

What are the 3 due diligence components required by IIROC dealer members?

Answer 1

• Identity and creditworthiness
• Business conduct
• Suitability requirement

Question 2

What are the 5 triggers for KYC to be reviewed?

Answer 2

• Acceptance of a trade
• Making a recommendation
• Transfer or deposit of securities into the client’s account
• A change of representative for the account
• A material change to KYC information on the account

Question 3

Absolute Return Objective

Answer 3

i.e. 7% a year

Question 4

Relative Return Objective

Answer 4

i.e. expected inflation + 3% per year

Question 5

Required return

Answer 5

estimate of the average annual return needed to meet the goals

Question 6

Client Discovery Process

Answer 6

1. set the stage and built rapport
2. conduct emotional discovery
3. bridge to financial discovery