Suitability rules

Self regulatory organizations (SROs), such as NASD, securities exchanges, and individual brokerage firms require that stockbrokers ensure that the investments they buy for you are suitable for you.

This means, for example, that the investments are appropriate for your age, financial situation, investment objectives, and tolerance for risk.

Brokerage firms require investors opening accounts to provide enough information about their financial picture to enable the broker to know what investments would be suitable.