Question

A rep at the firm has been working on determining appropriate investments for a client. The rep comes to the conclusion that a deferred variable annuity will be the best choice for this particular client. What determination must be documented by the rep in relation to the investment in the deferred variable annuity under FINRA Regulations?

(A) The rep and the member firm must confirm the age and identity of all beneficiaries to the account and ensure that account assets can be transferred freely.
(B) The rep must document the client's need or benefit of growth that is tax-deferred in the annuity.
(C) The rep and the member firm must determine whether or not the customer has exchanged variable annuities within the past year.
(D) The rep must document any arrangements between the firm and the rep in relation to sharing agreements at the firm.

Answer 1

The answer is: B) The rep must document the client's need or benefit of growth that is tax-deferred in the annuity.

Step-by-step explanation:

FINRA regulations considers that the primary concerns for their clients are suitability and benefit. In this case, the most relevant benefit of a deferred variable annuity is the tax-deferred growth that the client gets from this type of investment. So the rep must document the client's need for this tax-deferred growth.