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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

CFAACCAFRM

Who Needs to Know This Term?

  • Financial Analysts
  • Bankers
  • Traders

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Frequently Asked Questions

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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