What is Suitability Assessment?
Suitability Assessment A regulatory process by which investment firms determine if a financial product or portfolio strategy matches the investor’s risk profile, objectives, and constraints.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Suitability Assessment” Used in Practice?
MiFID II and FINRA require investment advisors to conduct a suitability assessment before recommending financial instruments to retail clients.
Certification Exam Relevance
Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Suitability Assessment?
A regulatory process by which investment firms determine if a financial product or portfolio strategy matches the investor’s risk profile, objectives, and constraints.
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