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LLQP (Life Licence Qualification Program) Practice Exam · Question

Which of the following is a unique advantage of a segregated fund compared to a mutual fund?

One of the primary advantages of segregated funds over mutual funds is that they may offer protection from creditors if a family class beneficiary (spouse, chil

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Question: Which of the following is a unique advantage of a segregated fund compared to a mutual fund?

Answer options: ✅ Potential protection from creditors if a family class beneficiary is named.

  • Higher historical returns compared to mutual funds.
  • Lower management expense ratios (MERs) than mutual funds.
  • The ability to trade intraday like stocks.

Correct answer: Potential protection from creditors if a family class beneficiary is named.

Explanation: One of the primary advantages of segregated funds over mutual funds is that they may offer protection from creditors if a family class beneficiary (spouse, child, parent) or an irrevocable beneficiary is named.

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