SIE practice questionmediumBest Interest and Suitable Recommendations
A registered rep recommends only proprietary products to all new accounts without considering customer needs. What standard is the representative likely violating?
- AMargin requirements
- BBest interest (suitability) standard✓ Correct answer
- CJoint account rules
- DInsider trading rules
Explanation
Why B — Best interest (suitability) standard
Suitability and best interest require recommendations based on customer needs, not just firm interests. B, C, and D are unrelated.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Investment Companies & Packaged Products questions
- A customer purchases Class B shares in a mutual fund account. Which fee is MOST likely applied?
- An investor opens an account with a mutual fund company. Which law primarily governs the fund's structure?
- Which best describes a registered representative's obligation regarding investment recommendations?
- A customer applies for an options account. What must the firm consider before approval?
- Which investment vehicle is regulated under the Investment Company Act of 1940?
- When opening a brokerage account, a registered representative's most important requirement is to:
- Front-running occurs when a broker-dealer:
- Under the Investment Company Act of 1940, which account type might hold mutual fund shares?