Segregated Funds & Annuities
Certification Exam
Canadian Pension Plan Benefits - ANS-CPP Income Formula = 8.4% annual tax x
number of years x CPP at age 65
RRSP Contributions - ANS-RRSP Contribution Room Formula = Income x 18%
Market-Linked GIC - ANS-A market-linked GIC has an interest rate that is tied to the
performance of the stock market, providing the potential for a higher interest rate in the
case of positive market returns. While the returns can be capped, there is potential for
more interest than other GIC products.
Cashable GIC - ANS-Cashable GICs offer clients the opportunity to take out their
money at any time but do have a lower interest rate in comparison to Fixed-rate GICs.
Foreign Dividends - ANS-Foreign dividends are classified as interest and are taxed at
his marginal tax rate. Only Canadian dividends qualify for the dividend tax credit. The
dividend tax credit makes Canadian dividends more tax-efficient than foreign dividends.
Annuity Advantages - ANS-Some advantages of annuities include:
No worry about outliving one's money when a life annuity or joint and last survivor
annuity is purchased. I
If the annuity is prescribed, less tax may be due in the early years of payment.
Only an annuity is guaranteed for life and can manage longevity risk.
Canadian Investor Protection Fund (CIPF) - ANS-For stock investors, the CIPF (the
Canadian Investor Protection Fund) provides investor protection in the case of dealer
insolvency.
In the case of dealer insolvency (but not market losses) The Canadian Investor
Protection Fund (CIPF) and the Investor Protection Corporation (IPC) of the Mutual
Fund Dealers Association (MFDA) insure MFDA members. The maximum amount of
coverage is $1 million for each general account.
Exchange Traded Fund (ETF) - ANS-Exchange-Traded Funds;
are highly transparent
are professionally managed
Certification Exam
Canadian Pension Plan Benefits - ANS-CPP Income Formula = 8.4% annual tax x
number of years x CPP at age 65
RRSP Contributions - ANS-RRSP Contribution Room Formula = Income x 18%
Market-Linked GIC - ANS-A market-linked GIC has an interest rate that is tied to the
performance of the stock market, providing the potential for a higher interest rate in the
case of positive market returns. While the returns can be capped, there is potential for
more interest than other GIC products.
Cashable GIC - ANS-Cashable GICs offer clients the opportunity to take out their
money at any time but do have a lower interest rate in comparison to Fixed-rate GICs.
Foreign Dividends - ANS-Foreign dividends are classified as interest and are taxed at
his marginal tax rate. Only Canadian dividends qualify for the dividend tax credit. The
dividend tax credit makes Canadian dividends more tax-efficient than foreign dividends.
Annuity Advantages - ANS-Some advantages of annuities include:
No worry about outliving one's money when a life annuity or joint and last survivor
annuity is purchased. I
If the annuity is prescribed, less tax may be due in the early years of payment.
Only an annuity is guaranteed for life and can manage longevity risk.
Canadian Investor Protection Fund (CIPF) - ANS-For stock investors, the CIPF (the
Canadian Investor Protection Fund) provides investor protection in the case of dealer
insolvency.
In the case of dealer insolvency (but not market losses) The Canadian Investor
Protection Fund (CIPF) and the Investor Protection Corporation (IPC) of the Mutual
Fund Dealers Association (MFDA) insure MFDA members. The maximum amount of
coverage is $1 million for each general account.
Exchange Traded Fund (ETF) - ANS-Exchange-Traded Funds;
are highly transparent
are professionally managed
