What is the main objective of the customer suitability requirement?

The main objective of the customer suitability requirement is to ensure that investment recommendations align with client needs. This requirement mandates that financial professionals conduct a thorough assessment of each client's financial situation, investment goals, risk tolerance, and other relevant factors before making recommendations. By doing so, it promotes a standard of care that aims to protect investors by ensuring that the products and investments offered are appropriate for each individual's specific circumstances.

This focus on aligning recommendations with client needs is fundamental to maintaining a fiduciary standard in the financial industry. It helps ensure that clients are not sold products simply because they yield higher commissions for the broker or advisor, or because they are limited to certain products without considering the client's investment profile. Ultimately, the suitability requirement serves to create a better investment environment that prioritizes the interests of the client.