Unexpected retirement, reduced income and new withdrawal requirements are significant changes to the client’s personal and financial circumstances. They may affect investment objectives, liquidity needs, time horizon, risk capacity and the ability to withstand market losses. The RR must update the KYC information and perform a suitability review before determining which investment actions are appropriate. Option C is correct.
Waiting until the next routine review could leave the client exposed to a portfolio built for circumstances that no longer exist. However, the RR should not automatically sell all equity holdings. The updated analysis may support reducing equity exposure, increasing liquidity or restructuring income sources, but the appropriate action depends on the complete revised profile, tax consequences, costs and portfolio composition.
Moving the client to an OEO account would not solve the suitability issue and may be inappropriate for someone continuing to require recommendations.
The RR should document the changed circumstances, confirm the accuracy of the updated information and analyze whether existing holdings, strategies and account types remain suitable. CIRO guidance requires KYC information to remain current and recognizes material changes and other triggering events as grounds for a new suitability determination. The current Retail Securities syllabus specifically tests the effect of retirement, liquidity changes and updated financial circumstances on suitability.
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