Suitability's Three Obligations

What this video covers

• Whether reasonable-basis suitability can fail before any customer is ever considered, and why product understanding through reasonable diligence comes first
• How the suitability rule's investment profile (age, tax status, financial situation, liquidity needs, risk tolerance, and more) differs completely from Know Your Customer's essential facts
• What customer-specific suitability requires: matching the product to this particular customer using the investment profile, not the essential facts list
• Why quantitative suitability looks at a series of recommendations together and requires the pattern be both excessive and unsuitable, not merely active
• How quantitative suitability differs from churning: no control or intent element is required for the former, but both control and intent to generate commissions are required for the latter
• The standalone prohibition on recommending a transaction, continuing purchase, or strategy unless the customer has the financial ability to meet that commitment
• Why financial ability to afford the purchase is not the same as holding power, which concerns withstanding volatility after ownership