Series 14: 8.1.1. Suitability

8.1.1. Suitability

While some ethical standards for securities professionals are black and white—do this or don’t do that—others are less straightforward. Suitability requires that securities professionals make a continuing effort to look out for their customers’ best interests and walk an ethical line. Suitability should always be considered when opening and maintaining an account for a customer.

Suitability is the idea that not all investments are right for all customers. One set of factors includes an investment’s cost, level of risk, expected return, and growth or income features. Another set includes an investor’s risk tolerance, liquidity needs, investment