Series 7 practice questioneasyCustomer Profiles and KYC 28
When opening a new account for a 55-year-old customer earning $135,000, which information is required under FINRA's Know Your Customer obligation?
- Athe customer’s religious affiliation, blood type, and employer’s payroll schedule
- Bthe customer’s favorite stocks only
- Cthe customer’s predicted market returns for the next year
- Dthe customer’s investment objectives, tax status, and risk tolerance✓ Correct answer
Explanation
Why D — the customer’s investment objectives, tax status, and risk tolerance
Know Your Customer requires firms to use reasonable diligence to learn essential facts about the customer. That includes investment objectives, tax status, financial situation, risk tolerance, and other facts needed to service the account and make suitable recommendations.
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