Suitability

Suitability

When your broker recommends that you buy or sell a particular security, your broker must have a reasonable basis for believing that the recommendation is suitable for you.  In making this assessment, your broker must consider your income and net worth, investment objectives, risk tolerance, and other security holdings.

The major securities industry self-regulatory organizations have suitability rules.  You'll find FINRA's suitability rule and links to other FINRA materials concerning suitability in the FINRA Manual on FINRA’s website.  If you believe your broker made unsuitable recommendations or engaged in another sales practice abuse, please send us your complaint using our online complaint form.

 

We have provided this information as a service to investors.  It is neither a legal interpretation nor a statement of SEC policy.  If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.