An agent at a broker-dealer recommends a fee-based account to a client who trades very infrequently. Which of the following best describes this situation?

1. AA potential conflict of interest due to unsuitable fee structure✓ Correct answer
2. BA proper recommendation as fee-based accounts are always better for clients
3. CA violation of the Uniform Securities Act's registration requirements
4. DPermissible if the agent discloses all commissions

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