Final answer:
An annuity is the most suitable investment product for a client with low risk tolerance requiring stable income, due to its fixed payouts and lower risk compared to stocks or bonds.
Step-by-step explanation:
For a client with low risk tolerance requiring income, the most suitable product would likely be an annuity. An annuity provides a fixed sum of money paid out every year, offering a reliable and stable income, ideal for those who are risk-averse. Unlike stocks or bonds, annuities offer a guaranteed payout, which can be appealing to individuals seeking a secure income stream during retirement.
While the potential returns on an annuity may be lower compared to higher risk options like stocks, the predictability and safety they offer align well with the needs of someone with low tolerance for risk. Clients should be aware of the tradeoff between the security of fixed payouts and potentially missing out on higher returns from more volatile investments.