Canada Harmonized Life Licence Qualification Program (HLLQP) Ethics Practice Exam

Ethical handling of replacement opportunities means putting the client’s interests first by being transparent, providing full disclosure, and offering an objective, side‑by‑side comparison of alternatives while giving the client room to decide without pressure. When a client is considering replacing a policy or product from another advisor, you should clearly explain the features, costs, benefits, and downsides of both keeping the current arrangement and switching to alternatives, including any financial implications such as surrender charges, tax effects, or changes in coverage. You should disclose any conflicts of interest, such as potential commissions from the new option, and ensure the advice is suitable for the client’s goals, risk tolerance, and financial situation. Document the discussion and respect the client’s decision, even if they choose not to switch. Pressuring the client, misrepresenting options, or omitting viable alternatives would violate ethical and regulatory standards.