A requirement that any investing strategy fall within the financial means and investment objectives of an investor or trader.
The appropriateness of a strategy or transaction, in light of an investor's financial means and investment objectives.
The appropriateness of a particular security as an investment for a particular investor, taking into account the specific features of the security and the investor's financial capabilities and sophistication, tax status, investment objectives and other relevant considerations. A security that seems appropriate for the investor in light of these factors is said to be “suitable,” whereas one that does not seem appropriate may be “unsuitable.” Broker-dealers are required under MSRB rules to make suitability determinations before recommending particular investments or investment strategies to customers. See: RECOMMENDATION.
Before a broker can recommend an investment to a customer, the broker must determine whether that investment is suitable. In making that determination the broker must ascertain and consider the customer's objectives, income, financial condition and age.
The capability of the software product to provide an appropriate set of functions for specified tasks and user objectives
Attribute of software that bears on the presence and appropriateness of a set of functions for specified tasks. (ISO 9126: 1991, A.2.1.1)
The appropriateness of an investment for a particular investor, taking into account his or her income, investment objectives, financial status and level of investment sophistication.
An investment which meets a client's investment objectives and financial situation.
A test for whether someone really should be investing in a particular security. Checking suitability goes along with the know-your-customer rule. Several blue sky laws require that certain investments be offered only to persons meeting a set of suitability standards, usually related to wealth and income. Determining suitability is part of what it means to qualify a prospect.
A determination of whether a trading strategy is in line with an investor's financial means and investment objectives.
A duty owed by a firm to all private advisory and all discretionary customers to provide advice/or undertake trades appropriate to the needs of the customer.
A suitability violation occurs when and investment made by a broker is inconsistent with the investor's objectives, and the broker knows or should know the investment is inappropriate.