RAA Professional Standards & Competencies 2

Question 1

An RAA advisor discovers a clerical error in a client's annuity contract that benefits the client financially. What is the professional obligation?

Accepted Answer

Disclose the error to the insurer and correct it

Answer

Advisors must uphold honesty and integrity by disclosing errors to all relevant parties, regardless of who benefits.

Question 2

Which of the following best describes the 'know your client' (KYC) standard for annuity advisors?

Accepted Answer

Documenting a client's financial situation, goals, risk tolerance, and time horizon

Answer

KYC requires a comprehensive understanding of the client's full financial profile to make suitable recommendations.

Question 3

A client asks an RAA advisor to recommend an annuity primarily because it offers the highest commission. What standard does this violate?

Accepted Answer

Suitability standard

Answer

Recommending products based on commission rather than client need violates the suitability standard requiring recommendations to serve the client's best interest.

Question 4

When must an annuity advisor provide a client with a free-look period disclosure?

Accepted Answer

At the time the annuity contract is delivered

Answer

Free-look disclosures must be provided when the contract is delivered so clients can review and return the policy within the allowed period.

Question 5

Which regulatory body primarily oversees the licensing and conduct of annuity advisors in the United States?

Accepted Answer

State insurance departments

Answer

Insurance products including annuities are primarily regulated at the state level by state insurance departments.

(RAA) Registered Annuity Advisor Practice Test

(RAA) Registered Annuity Advisor Practice Test

RAA Professional Standards & Competencies 2