IFIC Mutual Funds Licensing Practice Exam · Question
Under the Client-Focused Reforms (CFRs), when must a mutual fund representative assess the suitability of an investment product for a client?
The CFRs mandate suitability assessments at multiple junctures: at account opening, whenever a recommendation is made, and when a trigger event (e.g., significa
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Question: Under the Client-Focused Reforms (CFRs), when must a mutual fund representative assess the suitability of an investment product for a client?
Answer options:
- Only when the client explicitly requests a suitability review.
- Only at the initial account opening. ✅ At account opening, when a recommendation is made, and when a trigger event occurs.
- Only when the investment product is transferred from another financial institution.
Correct answer: At account opening, when a recommendation is made, and when a trigger event occurs.
Explanation: The CFRs mandate suitability assessments at multiple junctures: at account opening, whenever a recommendation is made, and when a trigger event (e.g., significant change in client circumstances) occurs to ensure ongoing suitability.
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