Which of the following best describes an underfunded client?

An underfunded client is best described as someone who cannot meet future liabilities. This situation arises when the client's available assets or investment income are insufficient to cover expected financial obligations, such as retirement benefits, debt repayments, or other long-term commitments.

The notion of being underfunded specifically pertains to the gap between liabilities and assets. When clients are underfunded, they face a risk of not being able to fulfill their financial responsibilities in the future, which can have serious implications for their financial health and planning.

In contrast, a client with a surplus of assets would indicate a strong financial position, whereas a client investing heavily in equities or aiming for high returns may have different investment strategies that do not directly speak to their funding status in relation to obligations. These other scenarios do not necessarily imply that a client is underfunded, as they can still have adequate resources to meet their future financial needs.