Series 7 practice questionmediumCustomer Profiles — Updating Information
A long-standing customer informs her representative that she has just retired and wants to change her investment objectives from growth to income. What is the representative's obligation?
- AIgnore the request since the original objectives were already documented
- BTransfer the account to another representative who specializes in income investing
- CImmediately liquidate all growth-oriented positions without further discussion
- DUpdate the customer's account records and reassess the suitability of current holdings✓ Correct answer
Explanation
Why D — Update the customer's account records and reassess the suitability of current holdings
When a customer's circumstances change, the representative is required to update the account records to reflect the new information. Under FINRA's suitability rules, any subsequent recommendations must be consistent with the updated profile. The representative should also review existing holdings to determine whether they remain appropriate for the customer's revised objectives.
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