Series 53: Suitability Information Requirements

Suitability Information Requirements

Generally, a dealer is only permitted to recommend a trade when it has sufficient information about the customer to reasonably believe that the recommendation is suitable for the customer. This involves using reasonable diligence to collect suitability information, such as a customer’s age, other investments, investment experience, financial situation and needs, tax status, time horizon, current income, liquid net worth, liquidity needs, risk tolerance and investment objectives, and any other information that the customer may disclose. This suitability information is called an investment profile. A recommendation can be made without some of the suitability information if the d